I believe that to understand the technological progress of humanity, we can separate them into two categories: innovations that improve reality and innovations that allow us to escape it. In recent decades, technological advancements have primarily taken the path of escaping reality. Books and cinema are probably the first major industries built on escaping reality, then video games, the internet, and social media have allowed us to do so on an even greater scale. Every time you take the subway, everyone is browsing their phone. This is a concrete example of escaping reality—being on a subway is not a comfortable or pleasant reality, and trying to escape this situation is quite normal. However, the improvement of reality has also developed rapidly, as with commercial aviation allowing travel worldwide and logistics enabling global merchandise trade. Big tech companies are thinking about the future of escaping reality with projects like Meta's Metaverse, which is expected to represent the future of social networks and workspaces. The concepts of augmented reality or virtual reality can be more broadly extended to entire sectors, not just companies that make glasses or headsets. Tech empires like Netflix or Meta are built on this dynamic, while other tech empires like Uber or Airbnb are built on the opposite dynamic. And artificial intelligence is no exception to understanding these two dynamics. AI applications like chatbots can be categorized as virtual reality, while applications like domestic robotics or autonomous vehicles can be categorized as enhanced reality. These two trends should be considered when investing in technology companies. Before, I thought that these two trends were in competition. And there is one thing we can observe quite quickly: it is a competition for attention and experience. My initial hypothesis was that solutions for escaping reality are alternatives for people who cannot afford the real experience. But this hypothesis was biased by my personal experiences, as I have always hated video games and favored real-life experiences. However, for many people and in many sectors, the virtual is better than the real. Some prefer the experience of playing FIFA to playing a soccer game with friends. When watching a movie, we can enjoy vicariously experiencing things we would hate in reality. Therefore, my initial hypothesis does not hold. And both can represent independent markets that develop without truly competing against each other. Both represent significant investment opportunities, and this analytical framework allows for a better understanding of the markets by taking into account consumer psychology. In the continuation of this article, we will delve deeper into the following aspects:
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Rabu, 24 Juli 2024
To Escape or Augment Reality
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