Hi, we are Zenith AI and this is AI Strategy, a newsletter where artificial intelligence intersects with macroeconomics and business strategy. AI Strategy covers the latest developments in the field of artificial intelligence and examines how companies act upon them. Follow us to understand how AI is changing the business world, why it matters, and what it means for you and your company.
Our Credo
We are Zenith AI, a group of individuals with very diverse backgrounds. Among us, you will find a consultant and a math lecturer at Oxford, venture capitalists, and the founder of a gen AI company. We also have different academic backgrounds. Some of us studied and lectured in Paris, Oxford, and Innsbruck, while others did so in Warsaw.
However, we share two significant commonalities:
Firstly, at some point in our lives, we attended the same school on Nowowiejska Street in Warsaw.
More importantly, we all agree that we are witnessing the brink of the most profound technological revolution since the debut of the first smartphone, or even since the moment internet access became widespread. If you find this hard to believe, you've either been living under a rock for the past 18 months, or you haven't been paying attention to the last 25 years of technological advancement.
The effects of this revolution are still difficult to imagine, especially considering how much our daily functions have changed by merely transferring content, previously accessible only on computers, to our pockets in the form of smartphones. Many huge companies (such as Instagram, Uber, Shopee, TikTok) operate almost exclusively in the mobile space, and many of their customers do not own computers at all.
AI revolution eats its predecessors for breakfast
Virtually none of the respected CEOs of the world's largest companies are asking themselves anymore whether AI will impact their company. Instead, the questions they pose now are not about if, but when and how AI will affect their business
Not only is it the biggest revolution in recent years, but it is also by far the fastest. ChatGPT, a tool many consider to be the symbol of this revolution, was tried by 100 million users in just 2 months following the launch of its 3rd generation model. This places it far ahead of the flagship brands of the mobile revolution, such as the previously mentioned TikTok and Instagram. Impressively, the first 1 million users tried out ChatGPT within just 5 days of its launch!
The wallets have spoken: AI is not a bubble
Many criticize the hype surrounding AI, claiming it has no tangible impact on the real business and companies’ financial performance. However, the information published at the beginning of 2024 definitively puts an end to these accusations.
OpenAI (the privately held company behind such gen AI tools as ChatGPT, Dall-e, and Sora) reported revenues of $2B at the end of 2023, recording a 50% increase in revenue since October 2023.
Klarna, the European market leader in BNPL, solved â…” of all customer service queries in January using LLM-based solutions. Klarna estimates that AI will save them $40M in 2024 - the equivalent of 700 FTEs.
We fully agree with Scott Galloway's thesis, which has called AI technology a corporate ozempic. Scott argues that some companies (mostly established technology companies) have discovered their own cure for corporate obesity in the form of AI. Scott writes:
Recent financial news features two stories: layoffs and record profits. These are related. There's no mystery to the surface narrative. A company lays off 5%, 10%, or even 25% of its workforce, and, 6 to 12 months later, after severance pay and expenses are flushed through the P/L, its operating margin hits new heights. The ultimate peanut-butter-and-chocolate shareholder confection is Meta, which produced a singular Hall of Fame quarter in Q4.
Behind the scenes: AI is eating the world
Meta and Microsoft are outbidding each other to buy GPUs from Nvidia, which at this point are a necessary prerequisite for developing LLMs on a large scale. Thus, this propelled the company's valuation to $2.3 trillion, making it the third most valuable company in the world, worth more than Alphabet or Amazon.
We believe AI is playing and will play a bigger role in this process than CEOs are willing to admit. Both layoffs and the implementation of AI by major corporations have become undeniable realities of business in 2024. Yet, discussing the intersection of these two factors in official communications remains largely taboo. Only a few companies, like Klarna, which are actively seeking a capital injection from investors, openly acknowledge enhancing operational efficiency at the cost of jobs.
Don’t leave it to the tech guys
The transformation has already begun and this is only the beginning. Each quarter, LLM makers are outdoing themselves in speed (inference), quality, and size (number of tokens) statistics, while GPUs and, more recently, LPUs makers are trying to match their pace by delivering petaflops of computing power. Thousands of startups are entering the scene, supported by billions in venture capital funding. AI startups are currently practically the only ones that cannot complain about difficulties in obtaining financing for the development of new products and services.
In this geometric tide of new products, services, and technologies,it's easy to get lost and through being passive or making wrong decisions, fall behind the market.
There are only two types of companies in this world. Those that are great at AI and everyone else. If you don't know AI you are going to fail. Period. End of story. And if you are a CEO, you can't just leave it to the tech guys.
We fully agree with Mark’s statement. A whole new category of consulting services will emerge and neither software houses nor established consulting companies will fill this gap. It will require a unique combination of expertise from the technology, product, and business worlds.
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In the AI Strategy newsletter, we want to monitor and analyze how AI is changing the business world from the broadest possible perspective - the strategic one. We want to understand and demonstrate how the development of artificial intelligence leads to the rise and fall of major companies. In the process, we'll share our insights on how AI can impact your business and offer suggestions on how to make AI an ally rather than a foe. If you enjoy this newsletter, please click subscribe below!
We are Zenith AI, a specialist AI strategic transformation consultancy. If you run a business or simply want to help your company use AI to improve your business and increase your competitiveness, don't hesitate to contact us through LinkedIn or our website. We have already helped many companies with their AI solution implementation strategy and implementation.