Building AI Businesses

Much like databases became a core part of software back in the 1980s, we have entered a new era of “AI/ML inside” software. So, what will the business models look like and do the economics (and ways we have of measuring existing software businesses) apply when AI/ML is inside?

The big idea: AI represents a fundamentally new type of business, one that may have lower margins than traditional software businesses. Not to mention a loooong tail of edge cases that makes scaling these businesses challenging. Businesses building software with AI/ML have a bright future, but success begins with understanding how building an AI business is different from traditional software (and managing expectations for others accordingly).

The key questions: Are AI businesses based on data models intrinsically different from software based on code? Or as the market matures, and as the GTM playbook and tooling advance, will AI businesses come to resemble software businesses?

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