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How Business Models are Changing Due to AI

Knownwell

How is AI going to fundamentally change the way companies conduct business? And how should you be thinking about the evolution of your company’s own business model?

David DeWolf, Courtney Baker, and Mohan Rao discuss the disruption that’s already started in many companies with the advent of AI. As we’ve covered on previous episodes, this is a revolution that many believe will upend not just many company’s business models but entire industries.

The team explores the distinction between a change in business model and a change in strategy, using Google’s recent layoffs as an example of a change in strategy and Apple’s decision to kill its Apple Car project and shift the entire team behind it to AI projects as an example of a change in business model.

Michelle Swan, Partner and CMO of Tercera, also joins Pete Buer to discuss how Tercera is examining AI opportunities for both Tercera and the portfolio companies they invest in. Michelle and Pete unpack a few of the AI-related trends Tercera sees figuring prominently in 2024 that they cover in a recently published post, Six Trends Impacting IT Services in 2024.

One trend is that Tercera sees AI consulting getting much more attention this year, as companies look to begin making headway with the AI investments they made in software and LLMs in 2023. A second trend is that AI will both add and alleviate risk. On the one hand, there’s a growing risk of bad actors using AI in areas like artificial identity. On the other, leaders can use AI tools to remediate threats and accurately predict which threats to expect.

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In the News Highlights

  • Courtney and Pete cover some of the latest AI news, including a Washington Post story with the headline of Turbo Tax and H&R Block now use AI for tax advice. It’s awful.
  • Pete’s takeaways? If you’re going to release an AI product, especially in an areas that can have serious consequences like helping people prepare their taxes, you owe it to yourself and your customers to make sure the implementation is fully baked. Neither company appears to have reached this point with these tax preparation bots.
  • They also dig into a recent article from The Verge titled Anthropic says its latest AI bot can beat Gemini and ChatGPT.
  • The big takeaway here is that seemingly new and improved LLMs are being rolled out on a regular basis. Keeping tabs on which LLM will be the best option for any particular use case can be a bit of a chore, but the overall message at this point would be to avoid getting locked in to any particular tool or technology.

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