AI and the compound effect
AI will compound and magnify the impact of other technologies. This will be the most powerful tool to address the biggest global challenges.
Most of my posts focus on how to lead and execute AI driven change. Once in a while, it is worth considering the macro. How will AI change the world?
It won’t.
“For the strength of the pack is the wolf, and the strength of the wolf is the pack”
Rudyard Kipling
On its own, AI is just another course on the menu for “software eating the world.” It builds on the platform of everything that has gone before.
This leads to potential change. In industries like education, healthcare and professional services. Or back office functions like finance, HR and procurement.
Important but incremental. Disruption will come from AI compounding and magnifying the impact of other technologies and trends. Some already exist and others are still on the horizon.
Technology is not the same thing as innovation. All the current hype is about the capability of AI technology. The world changes when we focus on new applications of technology.
Startups don’t need R&D. AI model performance is advancing quickly. Evaluation and comparison of new models is geeky and fascinating, but it means nothing. The critical stage is when the price and performance curve offers a base that is ubiquitous. At that point, AI technology becomes a platform and new businesses can thrive.
Startups change the world. Real change happens when entrepreneurs use the technology to break some real world constraints. Often that results in a new business model, for the startup and for its customers.
Founders want to build businesses with purpose. Startups will focus the technology on huge real world problems like climate change, poverty, disease and inequality.
Government and quasi government funds invest heavily in deep tech. This creates the platform on which innovators can build. Progress in deep tech faces headwinds from nationalism, deglobalisation and the entrepreneurial state mindset.
Huge amounts of cash washing around the global financial system. AI is burning this cash now. Money is highly mobile and will flow to more real world problems when applications with product market fit emerge. At some point, funds and focus will shift back to startups.
This creates the conditions for huge opportunity:
Bioengineering. The world of human biology is moving at least as fast as AI. The two technologies together will have a dramatic impact. As a side effect, I expect this to disrupt the traditional pharma industry and the interwoven academic and research networks which support it.
Climate tech. This is a bit of a catchall for a bunch of different technologies. It's a vast area of focus for both founders and investment cash. Remember the fundamentals. Dealing with climate is not a cost. It’s a massive investment opportunity.
There is a ragbag of other technologies that have received lots of investment but don’t have a proven path to real world uses yet: quantum, crypto, graphene are examples.
Companies big and small are lagging way behind in the adoption of tech. So there are still massive waves of change and opportunity in mobile, cloud, SaaS based technologies. Adding AI makes these technologies more powerful and compelling.
Tech is not the dominant force in global change. Other forces will shape the world:
AI winter is coming. The current hype cycle will bust at some point. The marching band and the foretellers of doom will leave the field. Tech will carry on down the same development path.
Friction will slow things down and divert the path of change: regulation; ethical panic; anti-tech sentiment; and traditional resistance to change.
Shockwaves driven by threats in global politics: weak government in democratic states; unsustainable government debts and spending in many countries; demographic change; and deglobalisation.
Building a sustainable business is the best way to address these risks. Governments won’t solve the big problems. Campaigners and activists won’t solve them either. If you want to make a difference, AI is another tool that you can use to harness technology for good.
Doing the next right thing
How and where will AI disrupt and drive change? What is the impact on your business strategy? If you are interested in figuring that out, I would love to help. Please get in touch.
Thanks for reading.