Artificial Intimacy & Deep Fake Love

A colleague and good friend was the Chief Marketing Officer of SAB Miller based in New York in the 2010s. He had challenges aplenty. The rise of craft beers and fragmentation of brands made it almost impossible to do traditional mass marketing, and of course, the decline in alcohol consumption per person, especially beer. But when I asked him who his biggest competitor was, his answer surprised me: Tinder.

He went on to say that dating apps like Tinder are a very clear substitute for pubs, clubs, and bars. Many patrons have traditionally gone to these locations to meet people. And while they may not like to admit it, when they enter the club, they look around at the options available and say, “Yes, No, Yes, No, No, No, Yes.” They immediately make a judgment on who they may like to engage with. And this is exactly what happens on Tinder, as people swipe right, left, right, left, left, left, right. You could even say that Dutch courage, or ‘beer goggles,’ has been replaced by on-screen filters that make everyone look a little bit better than in real life. No need to leave the couch to find a potential partner, just sit and swipe in your comfy tracksuit pants.

Digital interactions imitate the real world.

Finding Love Online

Online dating is very big business. We’ve come a long way from the dating videos from the 1980s – a place where mostly awkward people, and mostly men, sat in front of a camera in cable knit jumpers. The market size is over $US10 billion globally in revenue. The Match Group alone, out of the US, has a market capitalization of $US12.2 billion and was once valued at over $US30 billion. And while we could argue that this emergent digital business is part of the leakage from the newspapers' once-revered ‘rivers of gold’ – its second-order effects have probably had a bigger impact on investors. They have changed the social fabric and business models of youthful interaction.

The entire mating process and the business models which have underpinned it have changed more radically in the past 20 years than they did in the previous 2000 years. It’s no longer weird that people who met online get married – if they get married, that is. What we have seen is a classic substitution effect as per Porter's Five Forces. But now that substitution effect, is getting a little strange.

AI Substitutes – Deep Fake Love

While we are all familiar with Deep Fakes being used in politics and business, emerging from the same servers as image generation AIs and the power of large language models are AI girlfriends. And I’m not just talking about a text based chatbot people can flirt with. Things are now much more real than that.

AI-generated girlfriends now boast continuous AI-generated video, which has an almost no-noticeable difference from a live video chat with an actual person. The voice is hyper-realistic, and the ‘bot’ will have the exact look, identity, behaviour, and personality the end-user has designed for it, all generated by the customer via simple text prompts. An AI girlfriend who is there for her “partner’s” every beck and call, giving him (and it is mostly men), the kind of response he wants, every single time. We’ve now entered the era of designer partners – something no plastic surgeon could possibly compete with.

This is not nearly as niche as we may imagine. The list of tech companies providing what they call Virtual Companions is very long indeed: Eva.Ai, PicSo.ai, DreamG.ai, AI girlfriend, Myanima, Intimate – AI Girlfriend, RomanticAI, CoupleAI – Virtual Girlfriend, Replika: My AI Friend, Smart Girl: AI Girlfriend, My Virtual Girlfriend Julie.

Many of these are funded by respected venture capital firms such as AZ16. The estimated number of people with ongoing AI-centric relationships is in the many millions. Subreddits already exist where people discuss their AI companions in the way they may discuss a football team. But increasingly they are showing interactions which are getting weird, bordering on the AIs seeming sentient.

What happens next is easy to imagine. Adding these AI personalities to soft robotics where a fully formed physical likeness of an AI is built and sent to the customer. Just imagine the Sophia Robot, with a Boston Dynamics-like exoskeleton underneath it. When this happens, AI will exit the screen and enter the world just like Hiroshi Ishiguro has imagined.

The AI Girl on Call

The business model is just as you’d expect it to be: a classic freemium model. To get started is mostly free. But the more engaged the end user becomes and the more human one makes the AI, and the more the AI interactions which are had, the more the money it costs the user. The companions, of course, send frequent messages to their end user, prompting interacting as much as possible.

This is where it gets dangerous, especially give these interactions are so social and intimate. Our DNA is so heavily geared towards relationships that the human mind has a very difficult time delineating between real and online interactions. This is why people develop quasi-kinships with media personalities. In psychology, these are known as para-social relationships. We know the person so well, and in our mind, we believe that they too, know us. It’s also why celebrities are so frequently used in advertising.

We don’t need to be psychologists to imagine the potential behavioural implications. Men designing and controlling women, young people developing unrealistic expectations of what a healthy relationship is. One could easily postulate these kind of AI relationships quickly devolving into simulation of violence, and even, paedophilia. It’s a veritable minefield of long-term social issues waiting to happen. All of which the AI providers say they have guardrails against – of course, we’ve heard this before.

Disruptive Implications

The biggest technology disruptions are usually accompanied by simultaneous social changes. Just think about how the web changed the way we live, not just how it changed the financial landscape. Likewise, we should start to think seriously about how AI and robotics will change the nature of human relationships. It may well be that The Match Group gets disrupted by transhuman-AI relationships. You may remember the movie ‘Her’ from a decade ago where the protagonist fell in love with his operating system. Well, we are already there; it’s just happening in dark corners of the internet.

What we ought to be prepared for are changes that are fundamental shifts in humanity. An era of transhumanism. It is foreseeable that cohorts of society will push for transhuman marriages. And if you think that sounds strange, just imagine how gay marriage or transgender people would’ve sounded to anyone a few hundred years ago.

As AIs enter every single realm of society – we’ll see financial disruption that makes the past 30 years seem incidental. Fundamental shifts of human and computer interaction that change the human dynamic, creating a kind of techno-symbiosis – a species-level shift. And with it will come significant financial disruption and investing opportunities. Our job as investors is to look for changes in human interaction first, because that always happens before we see it in the numbers.