The AI Wrapper Trend and Its Impact on Genuine Innovation

In the last two years, we've seen an explosion of companies claiming to be "AI-first" or "AI-driven." It seems like every startup and their dog is jumping on the AI bandwagon, eager to cash in on the hype surrounding artificial intelligence. But here's the thing: slapping an OpenAI GPT-4 wrapper on your product doesn't make you an AI company.

The Rise of AI Imposters

Let's be clear: there's nothing inherently wrong with using existing AI models like GPT-4 in your product. These tools are powerful and can add significant value when used appropriately. The problem arises when companies market themselves as AI innovators or AI-first businesses when all they've done is integrate someone else's AI into their product.

It's like claiming you're a car manufacturer because you've installed a Toyota engine in your go-kart. Sure, you've created something that moves, but you haven't innovated in automotive technology.

What Makes a True AI Company?

A genuine AI-first company invests heavily in developing proprietary AI technology. This might involve:

1. Creating novel algorithms
2. Training custom models on specialized datasets
3. Developing unique applications that solve specific problems
4. Pushing the boundaries of what's possible with AI

Companies like DeepMind, OpenAI, and Anthropic are prime examples. They're not just using AI; they're advancing the field itself.

The Wrapper Problem

Many startups are essentially creating wrappers around existing AI models, particularly those from OpenAI. They might build a chatbot interface that uses GPT-4 or create a content generation tool that relies entirely on OpenAI's API.

While these products can be useful, they don't represent true AI innovation. They're more akin to clever applications of existing technology rather than groundbreaking advancements in AI.

The Dangers of AI Washing

This trend of "AI washing" – claiming AI credentials without substantial AI development – is problematic for several reasons:

1. It misleads consumers who might believe they're getting cutting-edge AI technology.
2. It can lead to inflated valuations and misplaced investor enthusiasm.
3. It dilutes the achievements of genuine AI innovators.
4. It could potentially lead to a bubble in the AI market, similar to the dot-com boom of the late 90s.

The Investment Perspective

From an investment standpoint, it's crucial to distinguish between companies truly innovating in AI and those simply riding the wave. True AI companies often have:

• Substantial R&D budgets
• Teams of AI researchers and data scientists
• Proprietary datasets or algorithms
• Patents or academic publications in AI fields

Looking Beyond the Hype

As consumers, investors, and industry observers, we need to look beyond the AI label. Here are some questions to ask when evaluating a company's AI claims:

1. What specific AI technology has the company developed in-house?
2. How does their AI offering differ from publicly available models?
3. What unique problems are they solving with AI that couldn't be addressed with traditional software?
4. Do they have a track record of AI innovation, or are they new to the field?

The Future of AI Innovation

The AI field is undoubtedly exciting and full of potential. But as the market matures, we're likely to see a shakeout. Companies that are merely wrapping existing models may struggle to differentiate themselves and maintain relevance.

On the other hand, businesses investing in genuine AI research and development are more likely to create lasting value. They're the ones who will drive the field forward, unlocking new possibilities and pushing the boundaries of what AI can achieve.

Conclusion

As we navigate this AI boom, let's recognize and support the true innovators. Let's maintain a healthy skepticism towards those who claim AI credentials without substantial investment in the technology. And most importantly, let's strive for honesty and transparency in how we talk about AI.

A GPT-4 wrapper doesn't make you an AI company. True AI innovation goes far beyond that. It's time we started distinguishing between the real deal and the AI pretenders.