FYI - For Your Innovation Who Captures Value In An AI World? | The Brainstorm EP 59
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Sep 4, 2024 Brett Winton, ARK's Chief Futurist, shares his insights on AI’s transformative economic impact. He discusses Amazon's innovative AI tools, highlighting their efficiency and cost-saving benefits. The conversation dives into the fine line between revenue generation and cost-saving in the AI sector. Winton explores the future of cold calling with AI, stressing the need for innovation in customer interactions. Lastly, he evaluates how reduced development costs in software could reshape pricing and business models.
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Amazon's AI Savings
- Amazon used its internal AI tool to upgrade its servers to the newest Java version.
- This saved 4,500 developer years, equating to roughly 0.5 billion dollars and annual operational cost savings of 250 million.
AI Value Capture
- Capturing value from AI cost savings is harder than from revenue generation.
- Cost savings often benefit the customer, while revenue generation allows for direct supplier profit.
Justifying AI Investments
- Nvidia's AI chip sales necessitate substantial revenue generation to justify the investment.
- Revenue generation allows for easier business model attachment due to direct cuts, like Monsanto's seed fees.