A pivotal year for AI?

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2024 was a big year for artificial intelligence (AI). From enhanced capabilities in models to sizable infrastructure investments, a lot happened in the AI industry. With so much happening, it can be easy to lose track of the milestones that defined the AI industry in 2024. This article revisits some of the year’s most significant events.

The rise and fall of the AI device trend

At the beginning of 2024, electronics companies leaned heavily into branding their products as “AI devices.” Why have a TV when you could have an “AI TV”? Why settle for a smartphone when an “AI phone” was an option? Many of these products were merely updated versions of existing offerings, rebranded to emphasize AI capabilities. If anything did change in these devices, it was the inclusion of AI chips, specialized hardware designed for machine learning tasks.

As soon as the AI device trend kicked off, I was skeptical. The AI branding strategy seemed like an attempt to capitalize on the global AI frenzy rather than a meaningful innovation. Shortly after the AI device trend was in motion, a marketing study revealed that including the term “artificial intelligence” in product descriptions reduced consumers’ purchase intentions. According to the report, emotional trust is a critical factor in purchasing decisions, and when it comes to AI, many buyers do not trust “AI products.”

As the study gained media traction, companies quickly pivoted away from marketing their consumer products with an “AI-first” narrative, and just like that, the AI device trend fizzled out.

AI wearables: High hopes, low adoption

AI wearables like the Rabbit R1 and Humane AI Pin were also launched in 2024. These devices aimed to make AI tools more accessible by allowing users to interact with them on the go. The idea behind many of these wearables was that instead of typing commands into a phone or computer, users could prompt these devices through voice commands, with outputs delivered audibly or via a companion app on the user’s phone.

Despite the initial excitement, AI wearables struggled to justify their existence. Why would anyone buy a wearable device when existing AI platforms offer similar—and often superior—functionality through smartphone apps? In addition, wearables introduced barriers to entry, such as high costs–typically upwards of $200 for the hardware–and subscription fees for 24/7 service.

On top of that, usability issues plagued these devices. Many users found the experience inconsistent, with wearables often failing to provide accurate or helpful responses alongside inconvenient user journeys. These shortcomings, combined with the convenience and reliability of smartphone apps created by tech giants with AI offerings, rendered AI wearables unnecessary for most consumers. By the year’s end, the wearable hype had died out.

Massive investments fuel the AI ecosystem

While consumer products faced challenges, AI’s already strong financial landscape got even stronger. Venture capital investment in AI increased year-over-year, even as overall venture funding declined across other sectors. In 2024, AI startups captured a larger share of all available funding, signaling investor confidence in the industry.

41% of venture capital raised this year has gone to AI companies pic.twitter.com/JkcGQP8wW5

— Sheel Mohnot (@pitdesi) December 20, 2024

Several companies made headlines with record-breaking fundraising rounds. OpenAI and Anthropic, for example, each secured over $1 billion in their respective rounds. Beyond AI service providers, significant investments were funneled into AI infrastructure. Notably, Microsoft (NASDAQ: MSFT) partnered with BlackRock (NASDAQ: BLK) to raise a $100 billion fund to build AI data centers and support energy providers.

Globally, AI investment totaled $55.3 billion in 2024, $1.2 billion more than the previous year. The way investment dollars gravitate toward the AI industry is a strong signal. It shows that investors believe the money they invest in a venture today will be worth a multiple in the future due to the value they expect AI companies to create and capture—although those profits have yet to materialize.

Regardless, the investments of 2024 pave the way for innovations in the future, so not only is the total dollar amount invested in AI significant, but what it makes possible for the industry in the future is equally important.

Text-to-video AI experiences early challenges

One of the most anticipated advancements of the year was the rollout of text-to-video generative AI tools. Tech giants began previewing and releasing these tools in late 2024, promising to revolutionize content creation. However, the launch of these tools was a bit underwhelming and so far has not lived up to the hype surrounding their releases.

Unlike generative chatbots, which replaced traditional search engines for many, the demand for turning text into video remains niche. That being said, the potential for these tools in creative industries is undeniable. High-quality multimedia productions, which traditionally require extensive resources and time, can now be created more resource-efficient and significantly faster using AI.

Limitations such as video length, resolution, and the need for skilled, prompt engineers prevent widespread adoption. However, as these tools improve, it’s only a matter of time before we see short films and other complex video projects that are 100% AI-generated.

The continuous improvement of AI models

In general, the most important milestone of 2024 was the continued improvement of AI models. Advances in hardware—including AI chips and expanded data center capacities—enabled these models to process more data and deliver better outputs.

The significant investments in AI infrastructure earlier in the year also played a crucial role. With more resources, companies can develop models that offer enhanced capabilities.

For consumers, these advancements translated to better user experiences across applications. Whether generating creative content, analyzing data, or automating routine tasks, the improved performance of AI models is beginning to make these indispensable tools in our everyday lives.

A pivotal year for AI

The consumer-facing AI industry made significant leaps forward in 2024. From short-lived trends like AI wearables to the notable advancements in model capabilities, the industry has made great strides. While we can’t say every innovation or piece of technology in the industry experienced success, the lessons learned and the investments made this year set the stage for a future filled with innovation.

In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI. 

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