The AI Business Model Framework is a comprehensive framework developed by Gennaro Cuofano that analyzes AI-based business models based on different layers that contribute to the overall value and success of the business: the foundational layer, the value layer, the distribution layer, and the financial layer.
Foundational Layer: What’s the underlying technological paradigm of the business?
Value Layer: How does the AI underlying tech stack enhance value for the user/customer?
Distribution Layer: What key channels is the business leveraging, and how is the company building distribution into the product?
Financial Layer: Can the company sustain its cost structure and generate enough profits and cash flows to sustain continuous innovation?
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Tag Archives: Strategy
AI is killing the old web, and the new web struggles to be born
In recent months, the signs and portents have been accumulating with increasing speed. Google is trying to kill the 10 blue links. Twitter is being abandoned to bots and blue ticks. There’s the junkification of Amazon and the enshittification of TikTok. Layoffs are gutting online media. A job posting looking for an “AI editor” expects “output of 200 to 250 articles per week.” ChatGPT is being used to generate whole spam sites. Etsy is flooded with “AI-generated junk.” Chatbots cite one another in a misinformation ouroboros. LinkedIn is using AI to stimulate tired users. Snapchat and Instagram hope bots will talk to you when your friends don’t. Redditors are staging blackouts. Stack Overflow mods are on strike. The Internet Archive is fighting off data scrapers, and “AI is tearing Wikipedia apart.” The old web is dying, and the new web struggles to be born.
The web is always dying, of course; it’s been dying for years, killed by apps that divert traffic from websites or algorithms that reward supposedly shortening attention spans. But in 2023, it’s dying again — and, as the litany above suggests, there’s a new catalyst at play: AI. — Read More
AI and Moore’s Law: It’s the Chips, Stupid
Moore’s Law, which began with a random observation by the late Intel co-founder Gordon Moore that transistor densities on silicon substrates were doubling every 18 months, has over the intervening 60+ years been both borne-out yet also changed from a lithography technical feature to an economic law. It’s getting harder to etch ever-thinner lines, so we’ve taken as a culture to emphasizing the cost part of Moore’s Law (chips drop in price by 50 percent on an area basis (dollars per acre of silicon) every 18 months). We can accomplish this economic effect through a variety of techniques including multiple cores, System-On-Chip design, and unified memory — anything to keep prices going-down.
I predict that Generative Artificial Intelligence is going to go a long way toward keeping Moore’s Law in force and the way this is going to happen says a lot about the chip business, global economics, and Artificial Intelligence, itself. — Read More
The people paid to train AI are outsourcing their work… to AI
A significant proportion of people paid to train AI models may be themselves outsourcing that work to AI, a new study has found.
It takes an incredible amount of data to train AI systems to perform specific tasks accurately and reliably. Many companies pay gig workers on platforms like Mechanical Turk to complete tasks that are typically hard to automate, such as solving CAPTCHAs, labeling data and annotating text. This data is then fed into AI models to train them. The workers are poorly paid and are often expected to complete lots of tasks very quickly.
No wonder some of them may be turning to tools like ChatGPT to maximize their earning potential. But how many? — Read More
AI could shore up democracy – here’s one way
It’s become fashionable to think of artificial intelligence as an inherently dehumanizing technology, a ruthless force of automation that has unleashed legions of virtual skilled laborers in faceless form. But what if AI turns out to be the one tool able to identify what makes your ideas special, recognizing your unique perspective and potential on the issues where it matters most?
You’d be forgiven if you’re distraught about society’s ability to grapple with this new technology. So far, there’s no lack of prognostications about the democratic doom that AI may wreak on the U.S. system of government. There are legitimate reasons to be concerned that AI could spread misinformation, break public comment processes on regulations, inundate legislators with artificial constituent outreach, help to automate corporate lobbying, or even generate laws in a way tailored to benefit narrow interests.
But there are reasons to feel more sanguine as well. — Read More
AI Is a Lot of Work
As the technology becomes ubiquitous, a vast tasker underclass is emerging — and not going anywhere.
A few months after graduating from college in Nairobi, a 30-year-old I’ll call Joe got a job as an annotator — the tedious work of processing the raw information used to train artificial intelligence. AI learns by finding patterns in enormous quantities of data, but first that data has to be sorted and tagged by people, a vast workforce mostly hidden behind the machines. In Joe’s case, he was labeling footage for self-driving cars — identifying every vehicle, pedestrian, cyclist, anything a driver needs to be aware of — frame by frame and from every possible camera angle. It’s difficult and repetitive work. A several-second blip of footage took eight hours to annotate, for which Joe was paid about $10.
Then, in 2019, an opportunity arose: Joe could make four times as much running an annotation boot camp for a new company that was hungry for labelers.
… [I]t was a job in a place where jobs were scarce, and Joe turned out hundreds of graduates. After boot camp, they went home to work alone in their bedrooms and kitchens, forbidden from telling anyone what they were working on, which wasn’t really a problem because they rarely knew themselves. — Read More
GPTs are GPTs: An Early Look at the Labor Market Impact Potential of Large Language Models
We investigate the potential implications of large language models (LLMs), such as Generative Pre-trained Transformers (GPTs), on the U.S. labor market, focusing on the increased capabilities arising from LLM-powered software compared to LLMs on their own. Using a new rubric, we assess occupations based on their alignment with LLM capabilities, integrating both human expertise and GPT-4 classifications. Our findings reveal that around 80% of the U.S. workforce could have at least 10% of their work tasks affected by the introduction of LLMs, while approximately 19% of workers may see at least 50% of their tasks impacted. We do not make predictions about the development or adoption timeline of such LLMs. The projected effects span all wage levels, with higher-income jobs potentially facing greater exposure to LLM capabilities and LLM-powered software. Significantly, these impacts are not restricted to industries with higher recent productivity growth. Our analysis suggests that, with access to an LLM, about 15% of all worker tasks in the US could be completed significantly faster at the same level of quality. When incorporating software and tooling built on top of LLMs, this share increases to between 47 and 56% of all tasks. This finding implies that LLM-powered software will have a substantial effect on scaling the economic impacts of the underlying models. We conclude that LLMs such as GPTs exhibit traits of general-purpose technologies, indicating that they could have considerable economic, social, and policy implications. — Read More
#strategy, #chatbotsLoneliness, insomnia linked to work with AI systems
Employees who frequently interact with artificial intelligence systems are more likely to experience loneliness that can lead to insomnia and increased after-work drinking, according to research published by the American Psychological Association.
Researchers conducted four experiments in the U.S., Taiwan, Indonesia and Malaysia. Findings were consistent across cultures. The research was published online in the Journal of Applied Psychology. — Read More
The Study
Existential Risk? I Don’t Get It! (by Andrew Ng)
Prominent computer scientists fear that AI could trigger human extinction. It’s time to have a real conversation about the realistic risks.
Last week, safe.org asserted that “Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war.” This statement was signed by AI scientists who I really respect including Yoshua Bengio and Geoffrey Hinton. It received widespread media coverage.
I have to admit that I struggle to see how AI could pose any meaningful risk for our extinction. AI has risks like bias, fairness, inaccurate outputs, job displacement, and concentration of power. But I see AI’s net impact as a massive contribution to society. It’s saving lives by improving healthcare and making cars safer, improving education, making healthy food and numerous other goods and services more affordable, and democratizing access to information. I don’t understand how it can lead to human extinction. — Read More
Why AI Will Save the World (by Marc Andreessen)
The era of Artificial Intelligence is here, and boy are people freaking out.
Fortunately, I am here to bring the good news: AI will not destroy the world, and in fact may save it.
First, a short description of what AI is: The application of mathematics and software code to teach computers how to understand, synthesize, and generate knowledge in ways similar to how people do it. AI is a computer program like any other – it runs, takes input, processes, and generates output. AI’s output is useful across a wide range of fields, ranging from coding to medicine to law to the creative arts. It is owned by people and controlled by people, like any other technology.
A shorter description of what AI isn’t: Killer software and robots that will spring to life and decide to murder the human race or otherwise ruin everything, like you see in the movies.
An even shorter description of what AI could be: A way to make everything we care about better. — Read More
Rick's Cafe AI 