Warning Signs: Is the AI Startup Bubble Ready to Pop?

We’re just now starting to see the first signs of the AI hype subsiding. Recently, two of the highest flying generative AI startups Jasper and Mutiny started laying off employees. Jasper, which was probably the single biggest success story for a company built on top of ChatGPT, saw massive churn in their customers, apparently cutting their revenue in half from a high of 150M to 75M. News also came out that ChatGPT saw its monthly traffic and users decline for the first time, and visits to Character.AI the second most popular chatbot, has dropped 35%. That’s led many experts to say this is a sign the chatbot's novelty wearing off. And to top it off, the maker of ChatGPT OpenAI is now being investigated by the FTC for potentially violating consumer protection laws.

So is this the beginning of the end for what some have called the biggest bubble of all time, or just a temporary lull in the AI revolution to come? Let’s figure out what’s actually going on here.