2023: The Year AI Became Real

December 25, 2023

2023 was the year artificial intelligence became real for mainstream adoption. ChatGPT (launched late 2022) showed what was possible, and 2023 delivered the infrastructure, tools, and applications to make it practical. It was also a year of continued economic adjustment for tech. Let’s review what happened.

The AI Story

Key Milestones

ai_milestones_2023:
  march:
    - GPT-4 released (major capability jump)
    - Claude launched to public
    - AI safety concerns intensified

  may_june:
    - OpenAI ChatGPT plugins
    - Google Bard improvements
    - AI coding assistants became mainstream

  july_august:
    - Llama 2 open sourced
    - Enterprise AI adoption accelerated
    - Vector databases became essential

  november:
    - OpenAI DevDay (GPT-4 Turbo, Assistants API)
    - Custom GPTs announced
    - 128K context windows

  throughout:
    - RAG became standard pattern
    - AI features in every product
    - Prompt engineering as discipline

What Changed

paradigm_shifts:
  from_experimental_to_production:
    before: AI as interesting demo
    after: AI as production feature
    evidence: Every major product adding AI

  from_one_model_to_many:
    before: Use GPT-4 for everything
    after: Model routing, specialized models
    evidence: Open source models competitive

  from_basic_to_compound:
    before: Single LLM call
    after: RAG, agents, multi-step pipelines
    evidence: Standard architecture patterns

  from_text_to_multimodal:
    before: Text in, text out
    after: Images, documents, audio
    evidence: GPT-4V, multimodal applications

Technology Evolution

What Matured

technology_maturation:
  vector_databases:
    state: Essential infrastructure
    options: Pinecone, Weaviate, pgvector, Qdrant
    adoption: Mainstream

  rag_architecture:
    state: Standard pattern
    evolution: Basic → hybrid search → advanced retrieval
    adoption: Default for knowledge applications

  agent_frameworks:
    state: Experimental → early production
    tools: LangChain, LlamaIndex, custom
    adoption: Growing but cautious

  ai_observability:
    state: Emerging
    needs: Cost tracking, quality monitoring, debugging
    adoption: Early stage

  prompt_engineering:
    state: Recognized discipline
    practices: Templates, versioning, testing
    adoption: Variable maturity

What Surprised

2023_surprises:
  open_source_competitiveness:
    expectation: OpenAI dominates
    reality: Llama 2, Mistral competitive for many use cases
    implication: More choices, less lock-in

  cost_reduction:
    expectation: AI stays expensive
    reality: 10x cheaper over the year
    implication: New use cases viable

  enterprise_adoption_speed:
    expectation: Slow, cautious adoption
    reality: Rapid experimentation, production deployments
    implication: AI skills in demand

  capability_ceiling:
    expectation: Continuous capability improvement
    reality: Impressive but plateauing on some benchmarks
    implication: Engineering around limitations matters

The Broader Industry

Economic Reality

industry_state_2023:
  layoffs_continued:
    - More companies right-sizing
    - Efficiency focus sustained
    - Hiring more selective

  ai_investment:
    - Counter-cyclical AI investment
    - AI skills premium
    - AI startups well-funded

  profitability_focus:
    - Growth-at-all-costs ended
    - Unit economics matter
    - Sustainable business models

  remote_work:
    - Return-to-office pressure
    - Hybrid as compromise
    - Async practices improved

What I Learned

personal_learnings:
  ai_engineering:
    - It's a new discipline, not just ML
    - Engineering practices matter as much as AI
    - Build for failure and iteration

  product_strategy:
    - AI features need clear value proposition
    - "Add AI" is not a strategy
    - User problems first, AI second

  team_leadership:
    - Help team navigate AI adoption
    - Balance experimentation and delivery
    - Skills development matters

  technical_choices:
    - Start simple, add complexity as needed
    - Abstractions help but have costs
    - Own what's core, use services for rest

Looking to 2024

What I’m Watching

2024_watch_list:
  ai_agents:
    expectation: More autonomous systems
    challenge: Reliability and safety
    opportunity: Complex task automation

  multimodal_expansion:
    expectation: Video, audio, documents
    challenge: Cost and latency
    opportunity: New application categories

  open_source_ai:
    expectation: Continued improvement
    challenge: Catching frontier models
    opportunity: More deployment options

  ai_regulation:
    expectation: More concrete rules
    challenge: Compliance complexity
    opportunity: Trust and differentiation

  enterprise_maturity:
    expectation: Beyond POC to scale
    challenge: Production reliability
    opportunity: AI infrastructure market

My Priorities

priorities_2024:
  skills:
    - Agent architectures and safety
    - Multi-modal applications
    - AI system reliability
    - Cost optimization at scale

  content:
    - Practical production patterns
    - Real-world case studies
    - Emerging architecture guidance

  professional:
    - Help organizations adopt AI effectively
    - Bridge strategy and implementation
    - Build sustainable AI practices

Key Takeaways

For Engineers

For Leaders

For Everyone

Final Thoughts

2023 was the year AI became real. ChatGPT showed the potential; 2023 built the foundation for actually using it. The technology matured, patterns emerged, and serious production deployments happened.

2024 will be about scale, reliability, and finding where AI truly creates value. The easy experiments are done; the hard work of building sustainable AI-powered products is ahead.

It’s an exciting time to be building software.

Thanks for reading. Here’s to 2024.