Disrupting Pricing with AI: Insights from Steven Forth
Impact Pricing
Do You Think There Will Be Differentiation in AI?
Will different companies have different strengths in AI or have they all learned everything? No, no, I think there will be differentiation. Companies are going to tune these models in different ways. And that's great because that's an opportunity for value-based pricing.
Steven Forth is a Partner in Ibbaka, a strategic pricing advisory firm. He was CEO of LeveragePoint Innovations Inc., a SaaS business designed to help companies create and capture value. Steven is what I consider one of the great pricing thinkers in our industry.
In this episode, Steven talks about AI and how it is impacting the world of pricing. He also shares some of the improvements we could expect from AI infrastructures in the near future.
Why you have to check out today's podcast:
- Find out how the emergence of AI improves and disrupts the pricing profession and the trade as a whole
- Learn how to extract the best and most comprehensive solutions from AI tools
- Get an idea on how the "big 3" of cloud services might price for their AI services in considering their current pricing models
"Many billions of dollars being invested in AI last year, next year, this year. The overall investment is going to be probably in the neighborhood of $300 billion in 2023. So, if we were investing that much money, we better get some value back. And the companies investing that money need to be able to price that value they're creating."
– Steven Forth
Topics Covered:
02:10 – The questions that need to be answered about the impacts of AI in pricing
04:06 – Examples of existing value proposition that AI is improving
07:10 – Examples of existing value proposition that AI is disrupting
10:44 – Is the emergence of AI a challenge to the pricing profession?
12:08 – Can open AI soon generate value models that are better than experts create?
15:58 – Why and how large language models such as Chat GPT are taking over
18:06 – How to guide an AI in giving you comprehensive answers
19:34 – What the pricing of major AI infrastructures looks like
21:02 – How Amazon, Google and Microsoft would possibly price for AI considering their present pricing models
23:28 – Will there be different strengths in the AI of infrastructures Amazon, Google and Microsoft?
24:55 – Differences in AIs: Would different Ais give out different answers to the same questions?
26:19 – Could AI effectively learn pricing from human pricing experts?
28:02 – How Ais could start making outcome-based pricing more practical
32:03 – Connect with Steven Forth
Key Takeaways:
"People who are skilled in the art [of trade] understand how to come up with pricing for disruptive innovation." – Steven Forth
"Understanding the limitations of these large language models, which GPT is an example of, is also important. And we can come to that. But let's not forget that the limitations today are not the limitations in six months." – Steven Forth
"That, I think, is actually one of the emerging skills: To be able to structure a sequence of questions that will guide an AI in giving you meaningful answers." – Steven Forth
People / Resources Mentioned:
- Ibbaka – https://www.ibbaka.com/
- DALL·E 2 – https://openai.com/dall-e-2/
- Chat GPT – https://openai.com/blog/chatgpt/
- Amazon Web Services – https://aws.amazon.com/
- Google Cloud Services – https://cloud.google.com/
- Microsoft Azure – https://azure.microsoft.com/en-us
- NVIDIA – https://www.nvidia.com/en-us/deep-learning-ai/products/solutions/
Connect with Steven Forth:
- LinkedIn: https://www.linkedin.com/in/stevenforth/
- Email: steven@ibbaka.com
Connect with Mark Stiving:
- LinkedIn: https://www.linkedin.com/in/stiving/
- Email: mailto:mark@impactpricing.com
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