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Ross Sleight on AI: Adapt now, as business models are under threat

“We always overestimate the short-term and underestimate the long-term impact of things. That’s exactly what’s happening with AI today. So, in the long term, your business model is fundamentally under threat. In the short term, you’re going to have to adapt your business model.”

As chief strategy officer at digital transformation specialists CI&T, Ross Sleight has been monitoring Artificial Intelligence for several years. He advises clients on how to harness technology to significantly enhance their processes, especially in marketing and communications.

In this interview with Ashleigh Norris, Ross:

  • Explains how AI will change the nature of search.
  • Talks through how these innovations will challenge publishers and tech companies.
  • Advises media companies on how to experiment with AI.
  • Predicts how regulation of AI might roll out and how this will impact media companies.

What is your interest in AI? 

There are two aspects of AI that we work with. The first is that AI is used within our own teams. So, our own software delivery teams are utilising AI to enhance their efficiency and productivity.

The second aspect is that we’re looking at how AI can fundamentally affect the end-user experiences for our clients. That is where we’re starting to look at principles of personalisation and the ability to create greater impact through different usages of AI. That tends to be around the marketing/communications area, the customer operations area, and the product development area. In all those areas, AI can create meaningful differences in the end-user experiences through our clients’ products and services. 

What has surprised you most about AI development in the last 18 months?

The last 18 months have seen the opening of the public uses of innovations like ChatGPT and Bard, which have been eagerly adopted by consumers and businesses alike. 

You’ve got this mass adoption of AI amongst the public. At the same time, you have businesses thinking how AI can change how they do their current tasks. 

The adoption speed is massive. And then, on top of that, the quality of models that are starting to develop. There will be a massive amount of computational power available, so AI will become increasingly sophisticated. 

How is AI disrupting business models?

The announcement of Gemini by Google is one example of how search will fundamentally change. In that business model, Google brings up a number of search results, which are then monetised by pay-per-click adverts. You, as a user, go through multiple different search results to find what you’re looking for, basically generating more pay-per-click advertising. 

As Google starts to bring Gemini in, this will allow you to focus on the creation of pages or elements of pages in the search experience. This is then going to lead to fewer next-best actions. Also, users are not going to head off to lots of other different sites in the way they currently do.

Users will have a couple of options within the Google stack from the information provided and generated. This means they will stay longer on the search page, which means that search advertising, even though that’s included in Gemini, might not work in the same way. 

So, the search advertising market will change as people’s behaviour changes. 

The continuing incorporation of AI into the tech platforms’ stacks will mean that we will fundamentally question the interfaces that are operating today. For example, a travel site that demands that you say where you want to go and when you want to go in order to give you a list of options, will disappear. Instead, there will be open-ended questions about the type of place you want to go to. The AI will find those places and then an agent will find the best deals available for you and book it for you. 

Business models rooted in the principle that web pages are static or dynamic, are generated and hierarchically nested and have advertising on them will start to disappear as we move towards an interface that is much more about asking questions in a natural language manner.

If publishers have perfected their online strategies and built businesses that are advertising and affiliate-based, are their business models fundamentally at risk? Can they tweak their models to incorporate AI and be even more successful?

We always overestimate the short-term and underestimate the long-term impact of things. That’s exactly what’s happening with AI today. So, in the long term, your business model is fundamentally under threat. In the short term, you’re going to have to adapt your business model. The last 20 years of your work in digital transformation is just the last 20 years. Your work to survive in the next 20 years is not going to be the same. You have to transform again. You’ll have to adapt, because behavioural change will happen, interface changes will happen, business model changes will happen.

So, you need to go back to your CFO and your board and say, “I need the money to look at what the impact of AI will be across my business, I need to start experimenting with that. I need to work out how to create a business that will fundamentally adapt to the behavioural changes people will make by asking open-ended questions and being fed things that are relevant to them versus going off and finding stuff directly online”.

So, is your business model under threat today? Probably not. Is it under threat in five or 10 years? Absolutely. Unless you start doing something about it. So start experimenting, start understanding what the effects are on the day-to-day business. Also have some scenarios which allow you to say if we believe that interface is going to be X, then we have the ability to create an experience of Y out of that. 

Where will AI regulation come from? Are we looking at a repeat of GDPR, with Europe taking the lead? Or will the US tech giants agree on how AI should be governed?

I think it’s really tricky, because no regulation is going to happen through a single party. A government or an organisation might say, “This is what we want to happen within our boundaries and our shores”. But that doesn’t mean that whatever China is going to do, or whatever America chooses to do, will be any different. So there’s got to be an agreed set of guidelines around this. 

In a commercial world, those codes of conduct are always under pressure from shareholder value creation expectations. So, I am less convinced that self-regulation is the way forward here. I think it needs a combination of both. But, ultimately, we need to build on the work that’s gone on already and understand the impact that business will have on the process.

We don’t want to go through the same situation we had with social media, where we just let it roll. If we don’t anticipate the fact that there will be problems with AI moving forward in terms of the social and economic implications of the technology, we’re not really caring about our world at large. 

Will China care about the social implications of AI in the same way as the Americans or the EU will care about it? We’re already seeing the internet split into different areas. The EU internet is very different fro the US internet in terms of regulation. It’s obviously very different to what happens in China and Russia. We’re going to see some fragmentation happening. But ultimately, we need an agreement that models should only be publicly released to do X, Y, and Z, and that we should not allow them to be publicly released unless there is potential for them to augment and help humans.

*Watch the interview with Ross here.

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