As AI gains traction, some feel that only one can survive—will it be the metaverse?
With the metaverse came the promise of many things beyond our wildest imaginations, shaping the future of work, mental health and influencer marketing. However, with the artificial intelligence (AI) boom, its future hangs in the balance. But does it have to be one of the two to succeed? Social media platform Facebook’s recent switcheroo has people wondering.
Not too long ago, Facebook changed its name officially to “Meta” to signify its new course and ambitions. It spent billions of dollars in an attempt to become synonymous with the augmented reality-virtual reality platform. After incurring US$26 billion in losses from this new venture, Meta decided to shift its focus to AI. It comes as no surprise, seeing as the success of OpenAI’s chatbot ChatGPT in recent months has inspired many other companies to follow suit and tap into the power of generative AI.
Meta, Facebook’s parent company, will form a new product group focused on generative AI, bringing together teams from across the company to create innovative tools and experiences that incorporate this technology into all of Meta’s products. The long-term goal is to develop AI personas that can assist users “in a variety of ways”, as per Meta’s founder and CEO Mark Zuckerberg’s Facebook post on February 28.
But what does this mean for the metaverse at large? Read on.
How the metaverse is losing steam
In the metaverse, virtual real estate reigns supreme, and the price of Ethereum, which powers much of the activity, directly impacts the value of virtual land. However, the volatility in Ethereum prices has left many buyers and sellers struggling. This has resulted in a significant drop in the average sales prices for virtual land parcels, plummeting from over US$11,000 to below US$2,000, according to WeMeta.
Also, virtual land sales have seen a staggering 85% plunge in 2022, with Ethereum-based metaverse projects, such as the Sandbox and Decentraland, witnessing significant declines in their valuations and other vital metrics.
In February 2022, the average price of land sold across Decentraland reached an all-time high of US$37,200. However, by August 1, their value had dropped to an average of US$5,100. Similarly, the Sandbox’s average sale price plummeted from approximately US$35,500 in January to around US$2,800 in August.
The volatility of cryptocurrency prices, especially Ethereum, has introduced a new level of uncertainty to the market, leaving investors uncertain about the future of their virtual holdings. Besides that, the current version of the metaverse lacks proper infrastructure, governance and collaboration. That’s probably why some believe that, in its current state, the metaverse is nothing more than a marketing stint.
The potential of AI
Over the past three years, generative AI solutions have attracted more than US$1.7 billion in investment from venture capital firms, with AI-enabled drug discovery and AI software coding being the two most heavily-funded areas.
As the field of AI continues to advance rapidly, its impacts are being felt across various industries, including marketing and media. Gartner, a leading research and advisory company, predicts that generative AI use in these fields will increase dramatically over the next few years, with 30% of outbound marketing messages from large organizations expected to be artificially curated by 2025, up from less than 2% in 2022. But the impact of generative AI won’t stop there. By 2030, a major blockbuster film with 90% of the content being generated by AI from text to video could be released, according to Gartner’s projections.
Even though generative AI has great scope, its access is limited. For instance, ChatGPT’s mechanism is not open-sourced, which means that it is not available publicly. This limitation makes it difficult for other companies to replicate. However, Facebook aims to make smaller such AI models that companies can use and optimize, which will help to make generative AI more widely available and accessible.
The death of metaverse: fad or fact?
Though some reports suggest that this is the end of the metaverse, others feel that we mustn’t associate Meta’s redirection with the rejection of the metaverse as a whole. For instance, Amara’s Law, coined by computer scientist Roy Amara, states that humans often misjudge the timing and potential of technological breakthroughs, overestimating their short-term impact and underestimating their long-term potential. This tendency is seen in the skepticism and hype surrounding emerging technologies, such as self-driving vehicles, virtual reality (VR) and augmented reality (AR). Even the internet was once dismissed as a fad.
Additionally, AI—especially generative AI—might even have the potential to advance the metaverse by creating more convincing environments and characters.
What’s more, some vehemently deny the death or even a reduction in the popularity of the metaverse. With many companies employing the metaverse, the space is set to thrive. However, some structural changes will need to be implemented for that to happen. For instance, VR headsets will need to be much cheaper, and the virtual system will need to perform better on privacy.
Nearly every new invention was once a fever dream—often one to be terrified of. However, with time, these new technologies become so intertwined in our everyday lives that we cannot imagine a day without them. Perhaps that will be the metaverse’s destiny; if not, another immersive technological invention will replace it, leaving us to debate its dawn or demise.
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