AI will unleash a new wave of competition that will disrupt industries and redefine the nature of work itself. To survive it, businesses must know what sets them apart from existing competitors, as well as the likely new entrants to their fields.
“AI is not just a technological upgrade; it’s a transformative force that will reshape the competitive dynamics of all industries,” says Joseph Chittenden-Veal, Chief Financial Officer at Invisible Technologies.
“The businesses that come through it will be the ones that understand where they really add unique value to their customers or clients; they can then work out how AI can be applied to everything else.”
AI Leveled the Playing Field, but Only Temporarily
The rise of generative AI has democratized access to technology and seemingly leveled the playing field. No longer does acquiring the most powerful technology require significant resources. Instead, some of the most advanced AI models in the world today are available to anyone for free.
“Some large language models (LLMs) like ChatGPT almost bypassed major enterprises and went straight into the hands of consumers,” says Benjamin Plummer, Chief Executive Officer of Invisible Technologies.
“Suddenly, large enterprises were playing catch-up, rather than the other way around.”
While businesses hoping to take advantage of these consumer-facing models will still need to modify them for their own purposes, it’s a task that can now cost millions - rather than tens or even hundreds of millions - of dollars, Chittenden-Veal notes.
“Enterprises moving to AI can start with a discrete project, test it, and then start ramping up from there,” he says.
Sectors Already Disrupted by AI
At the same time, however, there are already instances around the world where fully - or close to fully - AI-powered organizations have rewritten the rules of engagement in entire sectors.
In 2017, Kakao, owner of South Korea’s leading social media platform, Kakao Talk, released an AI-driven and digital-only financial services provider
known as Kakao Bank, which offers users short-term deposits, loans, credit cards, stock trading, and overseas transfers.
The bank uses data gathered from Kakao Talk and other sources to provide an exceptionally personalized banking experience - one that integrates with shopping recommendations and gamified financial tools, such as savings apps.
Despite only launching in 2016, Kakao Bank now boasts more than 20 million customers from a population of just over 50 million. Valued at 10.08 trillion Korean Wan
(US$7.62 billion), it is also South Korea’s largest financial services firm by market capitalization, as well as its most recommended
According to a report from strategy adviser Oliver Wyman
, Chinese-based Ant Group has performed even better. The company, which owns Alipay, uses AI for almost all its operations, from detecting fraud to customer service and personalization. Founded in 2014, has accumulated 1.3 billion users around the globe and is now the second-largest financial services corporation in the world, behind only Visa.
“In the new banking environment, it is not track record or history that helps an organization stand apart; rather, it is the ability to operate with the kind of agility characteristic of software companies,” the report observes.
Every Sector is Vulnerable to Disruption
With AI becoming both more accessible and more pervasive, Chittenden-Veal says businesses in every country and every sector should soon expect similar levels of disruption.
“Because the barriers to entry are now low, every enterprise is going to be using some form of AI within the next few years,” he notes. “There will be an incredible amount of competition.”
“This should sharpen enterprise leaders’ minds to focus on what truly makes them differentiated. For the rest of their operations, they should already be looking at how AI can help them deliver more efficiently,” he explains.
Chittenden-Veal notes, for instance, that a legal firm might determine its real strength lies in devising innovative company structures or strategies. Meanwhile, the remainder of its work might be relatively mundane and equally well performed by any competent legal provider.
“This is the work that is better given to AI so that the lawyers are free to focus on where they add real value and can deliver the best and most efficient service to their clients.”
Unlocking Hidden Value
If large companies can understand their true value proposition and how they are differentiated from competitors, Invisible Technologies’ SVP of Growth, Jay Kumar, believes they could actually stand to gain more from AI disruption than smaller or challenger businesses.
“There is an incredible amount of knowledge embedded within most large organizations that newcomers to their industry can’t compete with. Now, AI has the capacity to unlock it,” he says.
“As organizations grow, it has traditionally become harder to manage and leverage institutional knowledge effectively. There are genuine coordination costs that happen as you get to scale,” he says.
“Imagine how powerful it will be for those companies that use AI to change this and break down the silos so that the organization genuinely shares knowledge and insights to work towards a common goal.”
“It will be like cutting the anchor from the ocean floor.”
Orchestration is the Key
Jay Kumar says, however, that unlocking the hidden value within a larger enterprise won’t mean that AI will be given free reign over everything. Employees will continue to remain a vital part of the equation.
“What will become more important is not the AI itself but the orchestration of AIs and humans to deliver on the value proposition,” Kumar says. “Most enterprises will likely need a host of AI models performing different tasks, as well as a human workforce.”
“It's about creating a harmony where AI handles the procedural, and human talent concentrates on the creative, the strategic— essentially the irreplaceably human — aspects of work," he concludes.
“The result will be a compelling offering for any customer or client.”