A recent Stratechery article argues that while the arrival of advanced AI like OpenAI's o3 model is a significant breakthrough, its impact on existing businesses will be uneven and delayed.

Ben Thompson draws parallels with the digital advertising revolution, where established companies like P&G initially struggled to adapt their strategies to the individual-centric nature of online advertising. New companies, built from the ground up around digital advertising, were the ones who truly capitalized on this shift.

Similarly, the author predicts that existing companies, with their ingrained processes and reliance on human "ammunition," will find it difficult to effectively utilize AI "ammunition" like o3. These companies, and the SaaS ecosystem that supports them, are built around managing and optimizing human workforces. AI, on the other hand, represents a potential shift away from human labor towards automated task completion.

Thompson suggests that new companies, unburdened by legacy systems and organizational structures, will be best positioned to leverage AI effectively. These companies will likely be smaller and more numerous, forming a "long tail" of AI-powered businesses.

In essence, the article argues that while the future of AI is bright, its integration into the business world will be a gradual and uneven process. Established companies will face challenges in adapting, while new, AI-native companies will emerge to take full advantage of this technological shift.

#TechInnovation #Investing #Technology #AI #ML #Tech #Business