Monday, January 22, 2024

Will AI Monetization Stifle Innovation?

Nearly a full month into 2024, and it's evident that this year is poised to be the "Year of AI," with virtually every aspect of our lives touched by AI in some form or another. However, as we witness the rapid development and subsequent market integration of AI, potential drawbacks are emerging. The two most significant hurdles seem to originate directly from tech giants.

AI Consolidation

Towards the end of 2023, major tech players such as Amazon, NVIDIA, Microsoft, and Google made significant moves to expand their AI portfolios, consolidating smaller companies under the umbrella of their massive enterprises. For instance, Amazon invested $4 billion in the startup Anthropic, while Google secured a $2 billion stake of its own. While these moves provide startups with the capital needed for growth, they often result in the acquiring companies exerting too much control over the projects, hindering their progress.

The desire to quickly monetize and grow a company, followed by potentially selling off the team's hard work, often leads to issues down the road. Companies like Amazon, Apple, and Google tend to absorb acquired ideas and software, which may either get shelved, completely reimagined, or fall by the wayside as companies explore other, potentially more cost-effective options.

While some acquisitions have led to great innovations, such as Apple incorporating features like Siri from the 30+ AI startups it acquired over the last decade, other instances, like Google shuttering numerous programs, showcase the potential pitfalls of consolidation.

AI as a Service and Pay-Walling

While consolidation poses challenges to development, the more significant concern lies in the tendency to place AI tools behind paywalls or offer them as subscription services. Companies naturally seek to monetize their AI tools swiftly and effectively. For instance, Microsoft already offers its AI tool Copilot as a subscription service, and Amazon reportedly plans to introduce a paid Alexa service, "Alexa Plus," featuring premium features.

Running these programs, developing infrastructure, and staying ahead in terms of development are costly endeavors for large companies. While pay-walling premium features is not a novel approach, consumers generally resist being forced to pay for tools they are already using. In the realm of new technology and the push for expanded integration and adoption, subscriptions may not be the most effective means to align consumers with corporate plans. If consumers push back against adoption, some otherwise promising companies might face setbacks.

Big Tech Control Playing Big Brother

One area I haven't really discussed is big tech and government level control. We are already seeing governments around the world  looking at regulations and attempts at controlling or slowing AI adoption. Historically speaking rapid progression of technology hasn't been the best thing. We've made some big mistakes over the years. Generally big tech has played big brother of sorts and held back quick rapid releases of new technology. Hint there are things they have now you still won't see for yrs because of costs Where this control and controlled slow releases may be warranted. The down side is if we attempt to slow adoption in one area we inevitably kill off competition and innovation in another!

If government regulation is overly strict it puts undue pressure on start-up companies and keeps them from the market. If they aren't strict enough then we see top tier companies effectively being the key-holders and keeping innovation out (or in). We end up putting in place too many barriers and true innovators suffer the consequences!

My Conclusion

From my background in the tech sector and the work I've done over the years I see the term AI as much more of a marketing term right now than anything else. People overlook that Siri, Alexa, Google Search ect are all essentially AI. For me personally I think the term as we currently use it Artificial Intelligence, really is a misnomer. I think Augmented Intelligence is far closer to what we currently have rather than the average person thinks of AI  (which is mostly a theatrical movie style computer driven intelligence).

I feel that if we see our current systems going to SaaS (subscriber or pay-to-use) we'll see consumer blow-back and companies will have to rethink their programs. I believe people are already starting to wake up to over utilization of the AI label and the market saturation of the term! My hope is companies keep an even keel on this and let the tech progress naturally. Hopefully smaller companies and individual developers are lost in the shuffle!

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