AIGC reboots the Metaverse

Irving Karonen
7 min readAug 23, 2023

--

After the initial conceptual hype, the metaverse industry is gradually getting clear path of development.

In 2023, the attention of tech giants around the world is drawn to AIGC. Metaverse, which was hot last year, seems to have suddenly gone off the heat.

But is this really the case?

Throughout last year, the metaverse gradually faded away from the wave tops, at the same time, the industry is also showing a trend of return to rationality. Instead of saying that the market’s enthusiasm for the metaverse has waned, it is more likely that the market has become more calm.

Another hot topic last year is ChatGPT. Once it is integrated with AIGC, the development of the metaverse will be greatly advanced.

The father of the metaverse business, Matthew Bauer, has also gone on record as saying that there are several types of businesses that are particularly suited to the metaverse, and that includes businesses focused on artificial intelligence and machine learning.

In fact, since the birth of the metaverse concept, its landscape includes artificial intelligence, the rising heat of AIGC will not bring down the demise of the metaverse, with the continuous development of AI technology, its integration with the metaverse has become more and more close.

Metaverse “slamming on the brakes”

In the past two years, whether in the science and technology circle or the capital circle, the metaverse once became a hot topic of discussion.

Meta, the parent company of Facebook, made a high-profile foray into the metaverse.

After the concept of metaverse landed in 2021, the metaverse-related industries further exploded in 2022, until it entered 2023, when generative AI, represented by ChatGPT, triggered a new round of artificial intelligence wave.

Almost overnight, AIGC stole the metaverse’s global attention and became the absolute top project of the tech industry.

Related metaverse players are also retreating, Microsoft, Meta, and other technology companies, collectively downsizing their metaverse business, starting to change their development paths, or downsizing their staffing.

In January this year, Microsoft announced global layoffs but also dissolved the industrial metaverse team that was just established four months ago, the team together with the two persons in charge of about 100 employees have all been dismissed. In April, Meta began the latest round of layoffs targeting employees in the technology department.

Data can better visualize the changes in the industry’s heat.

According to a recent report released by Dappradar, in the first half of 2023, the global financing of metaverse projects totaled about $707 million, while the total financing of metaverse projects for the whole year of 2022 amounted to about $7.6 billion, and the amount of financing in the first half of this year was less than 10% of that of the whole last year.

Late last month, Meta reported its second-quarter earnings, and its Reality Labs division lost $3.7 billion.

Reality Labs is dedicated to developing the virtual reality and augmented reality technologies needed for the Metaverse. Since the beginning of last year, the division has totaled more than $20 billion in losses.

So it seems that the metaverse doesn’t seem to have much to offer the general public in 2023, both at the capital level and at the performance level of the companies involved.

More and more industry experts and observers are beginning to stand on the “metaverse is dead” side, but it may be too early to sing the praises of the metaverse, although the industry stepped on the brakes, its long-term vision is still optimistic.

Meta’s executive Vishal Sha has said that the metaverse has not disappeared, and what has really disappeared is only the hype around it.

Regarding the company’s losses this year, Meta’s CEO Zuckerberg also said, “We need to take a long-term view of the situation.” He said that while continuing to invest in the AI space, Meta remains committed to its vision of a metaverse. While investors may be concerned in the short term, he is confident that this is a long-term bet.

The emergence of AIGC, on the surface, seems to squeeze part of the metaverse business area, but in fact, AIGC's multimodal content production capacity is precisely needed for the construction of the metaverse.

AI plays an auxiliary role in the metaverse

In fact, AIGC and metaverse are not concepts of the same dimension, the former is a new type of content production, the latter is a new type of digital ecology, and the two are not a simple zero-sum game relationship.

At the beginning of the metaverse proposal, AI was part of the underlying technology that supported the metaverse experience and became an important part of its infrastructure.

Without AI as the key, it is difficult to open the door of the metaverse. As a link between the virtual world and the real world, AI is one of the key underlying technologies for building the metaverse.

In terms of the new technology infrastructure of the metaverse industry chain, generative artificial intelligence, represented by ChatGPT, has become an important trend in the development of AI at present and in the future.

In fact, AIGC’s empowerment for the metaverse has already had many landing cases. On the one hand, AIGC has helped the metaverse’s cost reduction and efficiency, and on the other hand, the application of AI will inject more concrete experience into the metaverse.

At the level of cost reduction and efficiency, AI starts to empower the metaverse. With the help of AIGC, the virtual reality solution provider can greatly improve the production efficiency of metaverse content.

In the past, when companies do virtual reality design, they need professionals to make line drawings, and draw original paintings, and this process is at least 2 weeks. But now with the aid of AIGC, the process of making original drawings has been shortened dramatically, and more choices can be given to the business department in the creative and original drawing stage.

At present, AIGC’s 3D generation is still not too mature, but the industry generally believes that in the future, with the further development of AI technology, 3D generation will also be deeply applied to the metaverse. In terms of content costs, AI has helped make virtual spaces better.

In terms of heat, people do pay more attention to AI in 2023, and the metaverse seems to be less on the discussion table; however, in terms of the actual progress of the industry, the metaverse is currently in the stage of going from the concept to the scaling.

At present, the cost of 3D modeling in the metaverse is still relatively high, but as artificial intelligence modeling becomes more and more mature, this cost will also be greatly reduced.

The modeling of the metaverse is essentially a content production, and the application of AI can compress the production cost of modeling and accelerate the arrival of the metaverse.

If virtual space modeling can compress the cost from millions to tens of thousands level, there will be a large number of brands will not hesitate to flock to the metaverse at that time.

Metaverse industry, the turning point is coming

This is the year that the metaverse continues to settle down, bringing strong support to the industry’s development. The capital market is still hopeful about the story of the metaverse. Many industry insiders believe that in 2024, the metaverse industry will have an upward breakthrough state.

In June this year, Apple officially released the MR headset Vision Pro, which once again changed the way of human-computer interaction, and also gave the metaverse industry a confidence shot. It’s a device that is worn in the form of eyeglasses, allowing you to navigate with your eyes, click and scroll the screen with your hands, and give orders with your voice.

The Apple Vision Pro will be available in early 2024, and whether it will disrupt the industry is yet to be seen, but what is certain is that Apple MR becomes another key entrance to the metaverse.

The discussion of the metaverse, although it doesn't have as much heat as last year, on the one hand, because the public has a new hotspot for discussion such as generative AI, on the other hand, it also means that the industry returned to a more rational state, such as Vision Pro and other more products will be launched one after another. I think this settlement cycle is necessary for the healthy development of the industry.

The underlying hardware is key to the development of the metaverse industry, and when the hardware reaches a stage where consumers can afford it, a large number of consumers will flock in. When 4k-level MR devices can reach a level about the same price as a cell phone, the incremental number of users in the metaverse track will be substantial.

However, at present, the infrastructure of the metaverse is not enough, the consumer-level headset is not able to support everyone, which also led to the metaverse’s short-term liquidity will be not so good, only in the maturity of the underlying technology and the general public acceptance, under the two core effects of the metaverse can show the economic utility and value. With the improvement of hardware, especially after the output of Apple’s headset device in 2024, the industry will make further breakthroughs.

Strategy Analytics published a report titled “Metaverse Devices Forecast 2014–2027” which shows that by 2024, the market stock of metaverse devices will double from the current 50 million to 100 million. With the dual support of technology and hardware, the metaverse industry may create further incremental value and give more surprises to the market.

I write about fintech startups, entrepreneurial stories, and investments, opening up opportunities for new business perspectives! As a startup entrepreneur based in Helsinki, Finland, I will share with you my experiences and insights from the startup scene. Whether you are a beginner or an experienced investor, I will provide you with valuable content that will help you succeed in this fast-growing field. Follow me and join me on an exciting entrepreneurial journey in pursuit of new heights of business success!

subscribe link https://medium.com/@irving.karonen/subscribe

--

--

Irving Karonen

Web3 enthusiast, Entrepreneur, Scientist, and Financial Engineer. Sharing Frontlines of Innovation and Investments. Biz: irving.karonen@gmail.com