Gaurav Tewari, founder and Managing Partner of Omega Venture Partners.
If there’s one topic that’s dominated the news cycle in 2023, it’s generative AI. This field of technology has experienced a tremendous surge in growth and popularity in recent months, with services like ChatGPT, Dall-E and Stable Diffusion held up as powerful new tools to help humanity—or to doom it.
While generative AI is undeniably powerful, there has been much debate as to whether its benefits outweigh the risks. For some, the technology is a godsend for its ability to aid healthcare diagnoses, assist fraud detection and allow for more personalized customer experiences. For others, the technology poses risks of intellectual property theft, bias propagation and the elimination of creative, fulfilling human jobs.
My role as a leader of a technology investment firm has given me a front-row seat to the benefits and risks of generative AI, and our team has evaluated several thousand generative AI startups over the past year. My view is that while generative AI is a powerful tool that requires human oversight to deploy responsibly, it is not the harbinger of doom that critics suggest.
Generative AI Business Models
Generative AI business models can not only help companies streamline their daily tasks but also help grow revenue. Content creation is one of the most immediate applications of generative AI. Not only can this technology write emails, product descriptions and marketing copy from scratch, it can even optimize SEO keywords and phrases to maximize relevancy and reach. By enabling small teams to accomplish tasks that would typically require a much larger group, generative AI is catalyzing unparalleled opportunities for small business to perform like big business.
Some businesses are also using generative AI to aid in product design. For example, the fashion industry has begun using the technology to convert sketches and mood boards into high-quality designs. Fashion retailers and creative directors no longer have to rely on trend reports and market analysis to inform upcoming designs—instead, they can use generative AI to analyze unstructured data and inspire an array of designs. Designers can then work with these styles and looks to fine-tune the finished product. In December 2022, a group of fashion designers from the Laboratory for Artificial Intelligence in Design (AiDLab) threw a fashion show that featured designs supported by Generative AI.
Fraud detection is another area in which generative AI is proving to be an invaluable tool. Banks are training ML and AI algorithms with their historical data to suggest risk rules. By exposing generative AI to previous cases of fraud and non-fraud, they can train the system to block or allow certain user actions based on the likelihood of fraud. This allows for faster and more efficient fraud detection than humans can achieve alone.
Whether it’s product design or fraud detection, it’s important to note that the work being automated is largely of the low-level, repetitive and monotonous variety. You still need human involvement to ensure quality and safety in the final product. Generative AI’s real value is as a general-purpose productivity and efficiency multiplier. Indeed, a recent study by UPenn concluded that with Generative AI, an astonishing 15% of all worker tasks can be completed faster without compromising quality.
Addressing Concerns About AI
So, if the technology is so efficient and cost-effective, what is there to fear about generative AI? One common fear includes job loss, as some believe that AI replaces the need for human workers. But while generative AI automates plenty of work that used to be done by humans, it does not eliminate the need for human workers. The technology can serve to enhance jobs rather than replace them.
Take, for example, service jobs. You’re unlikely to find the sommelier at your favorite restaurant has suddenly been replaced with a chatbot. Instead, the various tasks that collectively constitute a job will be impacted differently. Some tasks will be unaffected, while others can be automated, augmented or replaced with new, higher-value tasks. The tasks of directing organizational operations may remain unchanged, but routine processes could become automated. AI could also be used to augment product promotion and customer service inquiries to inform and delight customers more effectively.
Another fear around generative AI centers around the creation of autonomous weapons. However, the Pentagon has already updated its weapons rules to govern the use of AI-powered autonomous weapons and introduce senior-level oversight for human intervention when necessary.
Ethical concerns around generative AI are valid, but it’s important to address them appropriately and within the right context. In order to fully understand the potential implications of generative AI, more research has to be done. Continued research and development can help improve generative AI capabilities, eliminate biases and address ethical concerns as they arise. Generative AI has the potential to revolutionize almost every industry and improve our quality of life, but only if we deploy and develop the technology in a responsible way.
The Future Of Generative AI
We don’t know the limits of what generative AI can do. By 2025, it’s estimated that generative AI technology will be used to discover more than 30% of new drugs and materials, resulting in significant cost savings for the healthcare industry. Generative AI is poised to be a powerful tool in financial forecasts and scenario generation, making predictions about future market trends and investment opportunities to reduce risk. It is also well-positioned to impact the entertainment industry, enabling companies to augment visual effects, preserve and colorize film and even age or de-age actors’ faces.
However, although generative AI can analyze vast amounts of data and patterns, it cannot replace human creativity, originality and common sense. Hence, human oversight is crucial in its development and deployment. Businesses and policymakers should approach generative AI thoughtfully to address ethical considerations and ensure that the path forward involves expanding the total economic pie to positively impact humanity.
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