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Ai in business

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Sairam Vedam
Sairam Vedam

The document discusses how artificial intelligence is transforming businesses and humanity. It provides an overview of how AI is being applied in various areas like marketing, supply chain management, manufacturing, and customer service to create significant economic value. Case studies are presented on how AI has added value to businesses and how every brand is becoming more conversational. The future of AI companies is discussed, noting they have different scaling and business models than traditional software companies and involve continued human support of AI systems. The document emphasizes the huge opportunities but also risks of AI for humanity.

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Artificial Intelligence in Business How AI is reshaping Humanity, Business and Everything
Agenda • Why is AI transformational? • AI for Planet • AI in India • AI in Life • AI for business • Market value of AI • How AI has transformed/transforming businesses- Case study • Future of AI companies
Bill Gates Touts Benefits of Open Research in AI
Why is AI transformational? Much has been written about AI’s potential to reflect both the best and the worst of humanity. For example, we have seen AI providing conversation and comfort to the lonely; we have also seen AI engaging in racial discrimination. Yet the biggest harm that AI is likely to do to individuals in the short term is job displacement, as the amount of work we can automate with AI is vastly bigger than before. As leaders, it is incumbent on all of us to make sure we are building a world in which every individual has an opportunity to thrive.” — Andrew Ng, Co-founder, and lead of Google Brain. Success in creating AI would be the biggest event in human history. Unfortunately, it might also be the last, unless we learn how to avoid the risks.” — Stephen Hawking, Famous Theoretical Physicist, Cosmologist, and Author. Our intelligence is what makes us human, and AI is an extension of that quality.” — Yann LeCun Profess or, New York University Artificial intelligence will reach human levels by around 2029. Follow that out further to, say, 2045, we will have multiplied the intelligence, the human biological machine intelligence of our civilization a billion-fold.” — Ray Kurzweil, American inventor, and futurist. Artificial intelligence will reach human levels by around 2029. Follow that out further to, say, 2045, we will have multiplied the intelligence, the human biological machine intelligence of our civilization a billion-fold. Ray Kurzweil, American inventor, The coming era of Artificial Intelligence will not be the era of war, but be the era of deep compassion, non-violence, and love.” — Amit Ray, Pioneer of Compassionate AI Movement and futurist
AI for Planet
AI in India
When was the last time? • You wrote a letter • You visited a bank • You watched a movie in the theatre • You purchased a book • You drove a car • You went to a doctor • You went to a school • You stepped out of your home
AI for Business
AI-Driven Companies Outpacing Traditional Firms • Understanding the revolutionary impact that Artificial Intelligence (AI) has on operations, strategy and competition is a must for every business leader. • It becomes even more important, especially if you’re planning to launch a digital start-up, or looking to revamp your traditional business. • The age of AI is being guided by the emergence of new kinds of firms, where the real value comes from algorithms, rather than traditional business processes. • Today, AI sets the prices on Amazon, recommends songs on Spotify, matches buyers and sellers on Indigo’s marketplace, and qualifies borrowers for an Ant Financial loan. Leading organizations expect to double the number of Artificial Intelligence (AI) projects in place within the next year, and over 40% of them plan to actually deploy AI solutions by the end of 2020.’- Gartner ( Image Source: hbr.org )
Does AI Constitute Software or Service or Both? • By and large AI environment, its nature and businesses are very different from traditional software companies. It’s most likely that they will combine the best of both software and services worlds. • Software: The major advantage for today’s software, including SaaS, is that it can be developed once and sold multiple times resulting in recurring revenue streams that are super-linear in scale with gross margins of 60%- 80%. They are protected by Intellectual Properties (typically the code generated by the work). • Service Business: It requires headcount and can be sold only once. The revenue streams are non-recurring & gross margins lower than 30%-40%. Scaling is ‘just’ linear at the best optimized level. • Software & Services: AI companies are increasingly combining the best of both worlds- software & services with better gross margins, scaling, and building better defence systems for AI businesses. It results in the emergence of an entirely new class of AI businesses altogether. • A number of AI companies that planned to sell pure software products are increasingly bringing services capability in-house and booking the associated costs. • Cloud infrastructure comprises the major chunk and there’s a hidden cost in store for AI companies.
The Market Value Of Artificial Intelligence • McKinsey estimates AI techniques have the potential to create between $3.5T and $5.8T in value annually across nine business functions in 19 industries. The study equates the value-add of between $3.5T to $5.8T as approximately 40% of the overall $9.5T to $15.4T annual impact that could be enabled by all analytical techniques. The following graphic compares AI’s impact in billions of dollars by Al impact as % of total impact derived from analytics.
The Market Value Of Artificial Intelligence • AI will generate up to $2.6T additional value in Marketing and Sales and up to $2T in Supply Chain Management and Manufacturing. McKinsey found that the greatest opportunities for AI in Marketing and Sales are in the Retail and High Tech industries. The study cites the frequent digital interactions between businesses and customers that generate larger data sets AI techniques rely on to complete analyses. The study team found that e-commerce platforms will specifically benefit as these platforms collect customer information including click data or time spent on a web page, and can then customize promotions, prices, and products for each customer dynamically and in real time.
The Market Value Of Artificial Intelligence • Customer Service Management, Pricing & Promotions, Next product to buy (NPTB) individualized offerings, Predictive Maintenance, and Yield Optimization are the functional areas AI can create the most incremental value. Additional Marketing and Sales areas where AI can contribute the most value include Customer Acquisition/Lead Generation, Churn Reduction, Channel Management and Marketing Budget Allocation. The following graphic compares the highest potential impact business problems by functional area. The relative impact of AI on each functional area is represented by the size of each area of the graphic.
Every industry, Every business is disrupted Elon Musk is CEO of Tesla and SpaceX, has plans to colonize Mars, and thinks AI may turn humans into its pets. But beyond the hype and his enormous net worth and Twitter presence, here's how Musk's companies are actually taking on ... virtually every industry.
What is common and different here
How AI has added value to business- Case study
Every brand is becoming conversational- Case study Source: Topbots © Not for public distribution without consent and approval
Future of AI companies • Overall, the future of AI companies is not like software companies as AI businesses involve continued human cognitive support to AI. The scaling is not as easy as we’d have imagined. Strong defensibility, which is vital for ‘build once and sell many times’ software model, doesn’t appear to come free. Maybe, over a period of time with improved technological efficacy resulting in reduced costs and market- wide adoption, it may happen. These qualities make AI much like a service business. The good part is that the scaling dynamics, defensive moats, and variable costs are all determined by market rather than individual businesses. There are few AI innovators who have left a trail of building successful products doing consistently good with their performances. The unfamiliar pattern suggested by data indicates that the AI market is new, providing huge market opportunities further forcing the emergence of new markets.
What can AI do for us all the ‘Humanity’
What else can AI do?

More Related Content

Ai in business

  • 1. Artificial Intelligence in Business How AI is reshaping Humanity, Business and Everything
  • 2. Agenda • Why is AI transformational? • AI for Planet • AI in India • AI in Life • AI for business • Market value of AI • How AI has transformed/transforming businesses- Case study • Future of AI companies
  • 3. Bill Gates Touts Benefits of Open Research in AI
  • 4. Why is AI transformational? Much has been written about AI’s potential to reflect both the best and the worst of humanity. For example, we have seen AI providing conversation and comfort to the lonely; we have also seen AI engaging in racial discrimination. Yet the biggest harm that AI is likely to do to individuals in the short term is job displacement, as the amount of work we can automate with AI is vastly bigger than before. As leaders, it is incumbent on all of us to make sure we are building a world in which every individual has an opportunity to thrive.” — Andrew Ng, Co-founder, and lead of Google Brain. Success in creating AI would be the biggest event in human history. Unfortunately, it might also be the last, unless we learn how to avoid the risks.” — Stephen Hawking, Famous Theoretical Physicist, Cosmologist, and Author. Our intelligence is what makes us human, and AI is an extension of that quality.” — Yann LeCun Profess or, New York University Artificial intelligence will reach human levels by around 2029. Follow that out further to, say, 2045, we will have multiplied the intelligence, the human biological machine intelligence of our civilization a billion-fold.” — Ray Kurzweil, American inventor, and futurist. Artificial intelligence will reach human levels by around 2029. Follow that out further to, say, 2045, we will have multiplied the intelligence, the human biological machine intelligence of our civilization a billion-fold. Ray Kurzweil, American inventor, The coming era of Artificial Intelligence will not be the era of war, but be the era of deep compassion, non-violence, and love.” — Amit Ray, Pioneer of Compassionate AI Movement and futurist
  • 7. When was the last time? • You wrote a letter • You visited a bank • You watched a movie in the theatre • You purchased a book • You drove a car • You went to a doctor • You went to a school • You stepped out of your home
  • 9. AI-Driven Companies Outpacing Traditional Firms • Understanding the revolutionary impact that Artificial Intelligence (AI) has on operations, strategy and competition is a must for every business leader. • It becomes even more important, especially if you’re planning to launch a digital start-up, or looking to revamp your traditional business. • The age of AI is being guided by the emergence of new kinds of firms, where the real value comes from algorithms, rather than traditional business processes. • Today, AI sets the prices on Amazon, recommends songs on Spotify, matches buyers and sellers on Indigo’s marketplace, and qualifies borrowers for an Ant Financial loan. Leading organizations expect to double the number of Artificial Intelligence (AI) projects in place within the next year, and over 40% of them plan to actually deploy AI solutions by the end of 2020.’- Gartner ( Image Source: hbr.org )
  • 10. Does AI Constitute Software or Service or Both? • By and large AI environment, its nature and businesses are very different from traditional software companies. It’s most likely that they will combine the best of both software and services worlds. • Software: The major advantage for today’s software, including SaaS, is that it can be developed once and sold multiple times resulting in recurring revenue streams that are super-linear in scale with gross margins of 60%- 80%. They are protected by Intellectual Properties (typically the code generated by the work). • Service Business: It requires headcount and can be sold only once. The revenue streams are non-recurring & gross margins lower than 30%-40%. Scaling is ‘just’ linear at the best optimized level. • Software & Services: AI companies are increasingly combining the best of both worlds- software & services with better gross margins, scaling, and building better defence systems for AI businesses. It results in the emergence of an entirely new class of AI businesses altogether. • A number of AI companies that planned to sell pure software products are increasingly bringing services capability in-house and booking the associated costs. • Cloud infrastructure comprises the major chunk and there’s a hidden cost in store for AI companies.
  • 11. The Market Value Of Artificial Intelligence • McKinsey estimates AI techniques have the potential to create between $3.5T and $5.8T in value annually across nine business functions in 19 industries. The study equates the value-add of between $3.5T to $5.8T as approximately 40% of the overall $9.5T to $15.4T annual impact that could be enabled by all analytical techniques. The following graphic compares AI’s impact in billions of dollars by Al impact as % of total impact derived from analytics.
  • 12. The Market Value Of Artificial Intelligence • AI will generate up to $2.6T additional value in Marketing and Sales and up to $2T in Supply Chain Management and Manufacturing. McKinsey found that the greatest opportunities for AI in Marketing and Sales are in the Retail and High Tech industries. The study cites the frequent digital interactions between businesses and customers that generate larger data sets AI techniques rely on to complete analyses. The study team found that e-commerce platforms will specifically benefit as these platforms collect customer information including click data or time spent on a web page, and can then customize promotions, prices, and products for each customer dynamically and in real time.
  • 13. The Market Value Of Artificial Intelligence • Customer Service Management, Pricing & Promotions, Next product to buy (NPTB) individualized offerings, Predictive Maintenance, and Yield Optimization are the functional areas AI can create the most incremental value. Additional Marketing and Sales areas where AI can contribute the most value include Customer Acquisition/Lead Generation, Churn Reduction, Channel Management and Marketing Budget Allocation. The following graphic compares the highest potential impact business problems by functional area. The relative impact of AI on each functional area is represented by the size of each area of the graphic.
  • 14. Every industry, Every business is disrupted Elon Musk is CEO of Tesla and SpaceX, has plans to colonize Mars, and thinks AI may turn humans into its pets. But beyond the hype and his enormous net worth and Twitter presence, here's how Musk's companies are actually taking on ... virtually every industry.
  • 16. How AI has added value to business- Case study
  • 17. Every brand is becoming conversational- Case study Source: Topbots © Not for public distribution without consent and approval
  • 18. Future of AI companies • Overall, the future of AI companies is not like software companies as AI businesses involve continued human cognitive support to AI. The scaling is not as easy as we’d have imagined. Strong defensibility, which is vital for ‘build once and sell many times’ software model, doesn’t appear to come free. Maybe, over a period of time with improved technological efficacy resulting in reduced costs and market- wide adoption, it may happen. These qualities make AI much like a service business. The good part is that the scaling dynamics, defensive moats, and variable costs are all determined by market rather than individual businesses. There are few AI innovators who have left a trail of building successful products doing consistently good with their performances. The unfamiliar pattern suggested by data indicates that the AI market is new, providing huge market opportunities further forcing the emergence of new markets.
  • 19. What can AI do for us all the ‘Humanity’
  • 20. What else can AI do?