California's AI fail + new video model crushes it

Hey there,

I hope life, work and the world of AI are treating you well!

Three big things in AI and tech to share:

#1 – Pika releases a sweet new video model

You can try it at Pika.art (yes, weird domain name) and see some demos here. We've been waiting with bated breath for better publicly accessible video tools since we saw the OpenAI Sora teasers in February. RunwayML and Pika are two of the best video tools on the market right now, and Pika's newest release is legitimately impressive.

• I created this video based on a photo of a head of lettuce - AI added the crushing effect​
• Here's one with that started with a stock photo of a Gameboy with the prompt "Melt it"​

They both came out really good!

I paid for the $10/mo upgrade to get faster generation time, and waited about 10 minutes per 5-second video. That said, the quality is awesome and I could definitely see Innovating with AI students creating cool shorts (like Airhead, created with Sora) in the near future.

On that note, have you watched my interview with Cobra Kai editor Zack Arnold about AI + Hollywood yet?

#2 – A web design downturn (+ AI solution)

This is tangentially related to AI, but very relevant to all the folks going through our AI Consultancy Project's founding membership cohort right now.

Since I have been a software developer for 20+ years, I have a lot of friends, clients and colleagues in the web design, branding and marketing industry. They're telling me that work has dried up in a mind-boggling way this year. Dozens of agencies basically saying the same thing – halving of revenue or worse; 90+ competitors on a single bid, and widespread layoffs.

Basically I see a few things happening in tandem:

• The reduction in venture capital expenditures as a result of higher interest rates has negative downstream effects on marketing/design, even if your clients aren't directly venture-funded
• AI is taking at least a few design and writing jobs, or allowing work that used to require 2-3 people to require 1 person. Case in point: I used to use a service called Design Pickle to do illustrations for my articles; now, at least for my needs, AI completely replaces this service that previously employed numerous designers.
• Layoffs in Big Tech (Meta, Google, etc.) have flooded the market with designers/coders, so the traditional industry of design / marketing / coding agency businesses is just much more crowded than it was a few years ago.

That said, where we see a ton of success is in pivoting these businesses toward AI consulting. Two cases in point: Forbes recently interviewed a former marketing consultant who now charges $530/hr for AI consulting. And one of our own students, Ben, shared with me the story of how he reached out to his dormant web design clients and scored new AI consulting gigs.

#3 – California's governor vetoes a big AI bill

California's legislature has spent months working this bill through the system. In the end, Governor Gavin Newsom vetoed it.

A few students have asked me to comment on this, and the truth is that I don't have a super strong preference on it. Any bill where a legislature is chasing a fast-moving technology is going to have major flaws and blind spots.

I think Europe's GDPR privacy law is a great example of something that everyone made a huge deal out of that turned out to be mostly a dud. The EU has managed to fine Meta and similar companies a few times, but ultimately hasn't meaningfully changed the way those companies handle privacy, in my view. Meanwhile, that law has had the major unexpected negative side effect of proliferating cookie consent popups around the web, which to me is clearly a net-negative for Internet user experience. I think in 10 years we will ask ourselves, "What was the point of all that?"

Another example – which is highlighted in the popular book The Anxious Generation – is the '90s Children's Online Privacy Protection Rule ("COPPA"). In theory this law restricts children under 13 from using nearly all websites and apps ... in practice, we are in the midst of a nightmare of kids getting stressed out by and addicted to social media at much younger ages.

The takeaway is that no law is going to be sufficient for more than a few months or (at most) a year in such a fast-moving tech ecosystem. In the absence of cooperation by the tech companies themselves, an agile bureau that seeks to manage and regulate AI risk would be better than legislation that's always doomed to be outdated by the time it takes force. The Consumer Financial Protection Bureau, created after the financial crisis of 2008, could be a good model – they do real things like fighting on behalf of consumers who get stuck in predatory loans.

That's all for today!

If you enjoyed this "3 Big Things" format, reply to this message to let me know. I read literally every email.

(People often reply and say, "do you really read every email?" and then I read the email and reply yes 🙂)

Have a great day,

– Rob Howard
Founder of Innovating with AI