AInsights: Executive-level insights on the latest in generative AI….

I recently reviewed an AI report published by Coatue, a technology investment platform.

In this special edition of AInsights, I wanted to share some of the more notable insights from the research.  They demonstrate the significance of these times.

This is the moment to build AI-first and AI augmented organizations, beyond automation and the digitization of legacy models, processes, and mindsets. There will be disruptors. And, there will be the disrupted. Those in the middle will be riding momentum on borrowed time.

Let’s review the rapid rise and  impact of generative AI.

We Are Only at Day 1

We are at day 1 of AI, and only experiencing one of its coming waves at the moment. Already its trajectory is profound as compared to previous waves including the internet and smartphones.

Innovation Cycles are Accelerating

With the rise and shift of each new platform, adoption has been twice as fast in each wave.

Just think about what comes next and then again after that, all of which is coming at us twice as fast and then twice as fast again.

Quick Wins in AI Focus on the Bottom Line While AI Leaders Also Invest in Top Line Growth

Companies investing in AI pilots are already seeing huge efficiency gains, including increases in customer satisfaction. AI will not only have a backend effect, it will introduce growth opportunities.

GPUs Power AI; And We’re Just Getting Started

With the rise of AI comes the rise for compute. GPUs power AI.

There’s a reason OpenAI’s Sam Altman is seeking to raise trillions for silicon. There’s a reason NVIDIA just posted a stunning 265% growth in revenue YoY. Even last year,

NVIDIA was already skyrocketing.

For the 12 months ending 10/31/23, reported revenue was $44.870B, a 57.07% increase YoY.

NVIDIA annual revenue for 2023 was $26.974B, a 0.22% increase from 2022.

Keep in mind that ChatGPT launched toward the end of 2022. NVIDIA’s growth since then is just incredible.

GPUs is the right architecturefor AI because of parallel processing capabilities, scalability, energy efficiency, specialized computing tasks handling, and cost-effectiveness.

GPU Supply Cannot Keep Up With Demand

Demand for GPUs to power AI applications and use cases has far exceeded supply. Aftermarket prices are too, soaring. Expect more new players beyond Sam Altman. It’s reported that SoftBank’s Masayoshi Son is also exploring investments here.

A New Generation of Companies, Apps, and Devices are Coming

We’re shifting from ~15 years of digital transformation and the quest for organizations to become digital-first or technology-first companies to exploring the meaning of AI in their business transformation.

We’re about to see what AI-first companies look like.

In previous technology waves, we were introduced to new businesses that introduced creative destruction to traditional industries or created entirely new products, service, and capabilities as market disruptors.

Think about it this way. The internet, social media, smart phones, they’ve each set the stage for new types of companies that the world didn’t know to expect. The same is true for AI.

Who’s the Amazon or Netflix or Google in an AI-first world?

Who’s the Uber or Airbnb in the emergent landscape of AI-first companies?

New Players Will Introduce New Behaviors and Change the Course of Markets

Iteration helps people do things better, fast, more efficiently, at scale. In this regard, companies that limit AI’s potential to automating existing or legacy processes or models, will miss the S-Curve of innovation.

Innovation unlocks new value that changes behaviors. This is the basic definition of innovation. It enables people to do things they couldn’t do before. And new behaviors make old processes obsolete. This is the basic definition of disruption.

AI-first companies are not those who prioritize automation, cost-takeout, and workforce replacement. They are those that introduce collaboration opportunities between people and machines to introduce new value, changing behaviors in the process.

Companies that only iterate will find themselves on the wrong side of disruption.

AI Will Redesign Organizational Models

As an analyst, I researched digital transformation and how organizations invested in technology stacks and business models for 10 years. And in that time, I observed more digitization than transformation. In my first report, I explored how digital transformation and the “golden triangle” of the internet, mobile devices, and social media represented an opportunity for leaders to reimagine operational and business models toward innovation. Instead, iteration and digitization prevailed.

I don’t believe companies will have a choice with AI in the long-run. Transformation will not be optional.

AI-first companies will undergo so much more than digital transformation, we’ll see complete business and organizational transformation in the quest to become AI-first and AI-optimized. Expect entirely new AI-centric startup models to also reimagine systems and org charts as they change company trajectories forward.

AI Unlocks New Opportunities for Products and Services (and Market Leadership)

In Florence, Italy, I asked executives to think differently as they approach decisions for operational and business model innovation. I encouraged them to consider a new prompt when evaluating threats and opportunities, “WWAID” or “what would AI do?” The answers will help executives explore the unknown, to consider options and new trajectories that wouldn’t have otherwise existed.

We all don’t know what we don’t know. That’s the challenge and the opportunity.

Companies don’t have to reinvent themselves over night. There is a maturity to becoming AI-first. Start with areas of opportunity. Every company will fund internal and external AI startups.

What’s clear, is that AI is the first wave of technological innovation that requires organizations to change at their very core. Successful leaders won’t bolt-on AI to legacy processes, because they know they would only optimize pre-2023 ways of doing business.

Winners will look at creating the 2030 model, then the 2035 model, then 2040, etc., today.

Disrupt or die!

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