Thought Capital

ChatGPT and the AI Boom: Looking Past the Hype

What history tells us about the trajectory of disruption & what we think matters most

Note: This POV is adapted from a talk that Zhang Zhang delivered to all Polen Capital employees at a firmwide meeting in May 2023.


There’s always something to learn.

Investment management is an information-driven business. Looking back to 1971 when the Nasdaq exchange first launched, our industry has been intertwined with the exponential growth of information technology. It’s a privilege to work in a field that touches so many disciplines. It’s a dynamic, fast-changing world, with no shortage of interesting problems, things to learn, and wonderful people to work with.

Today, knowledge is almost free. We are swimming in information, making it essential to master the art of applying knowledge effectively. How do you use it to boost efficiency, effectiveness, and productivity? When it comes to disruptive technology like the much-hyped ChatGPT and other AI-driven tools, how do you know when to use these powerful capabilities and perhaps more importantly, when not to use them?

According to Gartner,1 generative AI is nearing the top of the artificial intelligence “hype cycle” (Figure 1). And we may be in for a long ride. This stage is typically followed by the "trough of disillusionment," a period during which the initial excitement fades as the reality of the technology's limitations and challenges become more apparent. Gartner estimates that it could take five years or more for us to navigate through this trough and reach a more mature understanding of generative AI's potential and limitations.


Figure 1: Gartner’s Hype Cycle for Artificial Intelligence, 2022

hype cycle

Source: Gartner, 2022.


To put current developments into historical context, there are plenty of examples of disruptive new technology that faded away (Google Glass) or simply became integrated into “business as usual” over time (smartphones). And sometimes, purportedly new technologies might not even be all that new at their core.

For example, when Gartner introduced its hype cycle model in 1995, the technology at the top of the peak was “intelligent assistants.” Does anyone remember Microsoft’s ubiquitous virtual assistant, “Clippy,” unveiled in 1997? Microsoft2 and other leading technology companies have been working with context-aware, reasoning software for decades, just as they’re now partnering with OpenAI to advance ChatGPT-powered capabilities. Furthermore, successful AI implementation often becomes as invisible or boring as the search and optimization AI that automates the backbone of our information economy, serving a purpose both modest in scope yet grand in scale.

As with anything new, there is a learning curve and an adjustment period. When you expand your boundaries, the area you need to cover increases, and the number of directions you can take multiplies. And so, amidst all that hype, we must stay grounded. At Polen, we strive to figure out what’s working and stick to the fundamentals—our fundamentals. We have successfully balanced innovation with tradition in the past by carefully evaluating new opportunities and only pursuing those that align with our core values.

Newness can be exciting and inspiring, and I believe everyone should lean into it. But we must also remember that in all this newness, it’s still the old us—still the old attitudes to improve, the old biases to challenge. Therefore, I believe it’s essential to be flexible, stay curious, and remain humble. By staying true to our principles, we can more effectively navigate the hype and expand our horizons while keeping our long-term goals in sight, and ultimately seek to understand how to harness this groundbreaking technology in the most effective and responsible way. After all, the wood will not chop itself.

Important Disclosures

1 Gartner is a holding in Polen’s Focus Growth portfolio as of June 30, 2023.

2 Microsoft is a holding in Polen’s Focus Growth and Global Growth portfolios as of June 30, 2023.

This information is provided for illustrative purposes only. Opinions and views expressed constitute the judgment of Polen Capital as of June 2023 may involve a number of assumptions and estimates which are not guaranteed and are subject to change without notice or update. Although the information and any opinions or views given have been obtained from or based on sources believed to be reliable, no warranty or representation is made as to their correctness, completeness or accuracy. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice, including any forward-looking estimates or statements which are based on certain expectations and assumptions. The views and strategies described may not be suitable for all clients. This document does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction.

The information in this document has been prepared without taking into account individual objectives, financial situations or needs. It should not be relied upon as a substitute for financial or other specialist advice. This document is provided on a confidential basis for informational purposes only and may not be reproduced in any form or transmitted to any person without authorization from Polen Capital Management.

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