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Sunday, August 27, 2023

Generative AI: It’s Game Even

While there are very incisive views on Generative AI and a magnitiude of perspectives on opportunities across sectors, spaces and geograohies foreseen, there is this thought provoking article “undisrupted” in the current issue of Economist(very telling it does not state who the author is),- in a nutshell arguing, “that despite the transformative potential of generative AI tools such as ChatGPT, large established companies are unlikely to be overthrown by AI-driven startups.The article posits that incumbents like Microsoft and Salesforce have advantages in distribution and others have valuable proprietary datasets, such as McKinsey and Bloomberg’ with its financial data. It argues that these resources allow them to integrate AI into existing products, thereby fortifying their market positions.

The article also highlights that the existing infrastructure enables easy adoption of AI models from giants like OpenAI and Alphabet Inc. limiting opportunities for new entrants.Lastly, historical data is cited; only 52 of the Fortune 500 companies were established after 1990, implying that disruption has not accelerated significantly over the years.”

On a related note, It's an impressive thought, that Nvidia's Jensen Huang's view in their earning call on VmWare, where in distributing the Genai kit through them, the focus is on supporting the management system, the operating system, the security and software-defined data center approach of enterprises and moves like this catapult both the big and the upstart to delve into GenAI on an entirely new baseline of readiness and maturity. Very interesting, though i feel that the author underestimates the potential for disruption from these startups. First , the article assumes that incumbents can easily integrate AI into their existing products. This is not always the case. AI can be complex and difficult to implement, especially in large, legacy systems. Startups, on the other hand, are often more nimble and can move more quickly to adopt new technologies. Second, the article assumes that incumbents have a monopoly on data. This is not necessarily the case. There are many ways for startups to collect data, such as through crowdsourcing or scraping the web. Additionally, the open-source nature of AI means that startups can access the same AI models as incumbents. Third, regulations will introduce its own impact on the progress/adoption. I expect the regulatory effects to more favour the unknown and dampen possibilities of a linear upside to incumbents And the article cites historical data to show that disruption has not accelerated significantly over the years. However, this data does not take into account the fact that the pace of technological change is accelerating. AI is one of the most disruptive technologies of our time, and it is likely to have a major impact on many industries in the coming years. Its also true that the big players of today wont try winning more with AI and as the adage goes, the faster one will adapt and succeed- "Its Game Even”

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