The weekly download: No 51
Nearly 70% of EU businesses haven't considered AI yet. Bu the platforms you rely on to reach your customers are already remaking the shop window....
I am in danger of living in an AI bubble. Not the stock market kind, the echo chamber type. It is easy to assume that everyone in the business world is thinking and talking about AI. Back in the real world, nearly 70% of businesses in the EU didn’t even consider using AI last year.
h/t Tera Allas for calling this out in AI adoption: the obstacle you can’t see. “Do nothing” is one of the two biggest obstacles to business change - “do it yourself” is the other. When it comes to tech change, both can be legitimate options. Is it just too early to be thinking about AI?
No. Delaying change feels like holding onto what you know in an uncertain world. That certainty is an illusion. Your people are already using AI. And people’s use of AI is changing the world around you.
Ben Thompson looks at one side of this in A Script for Mark Zuckerberg. The post is framed as the story he thinks Meta needs to present to investors.
His core point is that the engine of Meta’s business is digital ads. AI will improve this business by predicting the ads people want to see more accurately, building on the same machine learning techniques the company has used for years.
He goes on to make a less obvious point:
“AI makes every pixel monetizable, which means we are looking at the largest inventory expansion ever. Yes, it will take a few years to realize this opportunity, but the technology is there.”
Today, advertising is just that, a bunch of ads. You choose the content of your website and your ads carefully. You organise it around the audience you want and the platform’s algorithm. The game is fast moving but familiar.
AI allows consumers to roam over everything online. It doesn’t care about SEO or look only at your carefully curated content. AI helps people find and buy based on much more complete information about your product or service, including the information you don’t control.
Those things are great for Meta’s business.There is far more advertising space out there and Meta’s properties are some of the billboards people love to look at.
Thompson argues Meta will win because it has a great position with users, not because it is good at AI. In his analysis, the change favours the incumbent. Past cycles of disruption have not turned out this way.
Richard Rumelt picks up the theme in The Architecture of Disruption. His focus is the other behemoth of the online ad world, Google. In his analysis, Google’s core business of ads linked to search is under threat.
On the surface, the threat is simply that people use ChatGPT or Claude for search instead. The issue is deeper because the nature of search has changed. Using AI allows people to get answers without ever clicking a link. If your business relies on search traffic, paid or organic, then no-one will find you any more.
Google has seen this and is investing heavily to change its business model in response. Rumelt is sceptical because he believes ads injected into AI responses will undermine trust. Maybe. But if the ads are exactly what the consumer wants, wouldn’t that build trust rather than erode it?
Thompson favours the incumbent position. Rumelt believes a different incumbent will struggle to respond to the scale of change.
Either way, millions of businesses rely on Meta and Alphabet to reach their customers. If no-one walks past the shop window any more, what does that mean for your business?
A useful reminder that “doing nothing” does not mean nothing is changing. Customers, employees and platforms are already shifting how businesses are found and decisions are made. The shop window may still be there, but fewer people may be walking past it.