How Artificial Intelligence Is Transforming Business Models

From the production and marketing era to the relationship and intelligence era, business models have been evolving over the centuries. Over the years, the rise of artificial intelligence (AI) has fundamentally transformed the very meaning of ideas, innovation, and inventions. As a result, business models are evolving further. As we witness businesses across industries undergo a profound and dramatic shift in the relative balance of intelligence power, AI applications and adoption are offering each business entity as many new opportunities as it does challenges.

AI capability is already transforming business and commerce across nations. Rich or poor, developed or developing, small or large, AI has leveled the playing field for countries and brought their businesses a unique possibility to move forward and grow. While access to technology and information is universal, what is not common is how each business uses that information — for what purpose and goals. Although emerging technology levels the playing field to a degree for businesses across industries in their ability to access intelligence from the growing digital data and information, it is necessary to understand what the other parameters are that will help define individual and collective success in developing AI capabilities for businesses.

Acknowledging this emerging reality, Risk Group initiated a much-needed discussion on Artificial Intelligence for Business on Risk Roundup.

Disclosure: I am the CEO of Risk Group LLC.


Risk Group discusses “How Artificial Intelligence Is Transforming Business” with Dr. Eric Daimler, Co-Founder Conexus, Partner Spinglass, Board Member of Petuum, Presidential Innovation Fellow during the Obama Administration based in the United States.

The Coming Data Challenges

Businesses across nations are expected to face extraordinary challenges and changes in the coming years. It is believed that automation driven growth will likely be the only constant in those changes. In AI-driven automation, growth means more intelligence from data from connected devices, social media, industry data, and more that furthers the potential to revolutionize business models. Over the years, digital data has been growing at a staggering pace across nations. It is essential to understand:(i) how this new data-driven intelligence reality brings each business across countries an entirely new world full of opportunities and risks; and (ii) what the expected consequences for each market (existing and emerging) would be?

Businesses are beginning to understand the implications of the evolving AI-driven automation ecosystem far beyond narrow artificial intelligence applications. While the relationship between data, information, and intelligence is complicated, and at times indirect, the force and pace of AI-driven automation changes expected in the coming years will present each business challenges and opportunities for its profitability. It will be fascinating to witness how the AI changes global business power dynamics.

Business Model Transformation

As everything is getting connected, businesses now have the chance to collect more data, get the necessary insights, and innovate. As a result, we will probably see a much-needed evolution of the markets: faster marketplaces, leaner operations, vibrant businesses, growing profits, informed consumers, and dynamic businesses.

That brings us to a critical point: how are business models being transformed by AI? While businesses across industries and nations are at a different level of AI adoption, it seems that the current approach to AI strategy is overly narrow as businesses mainly focus on using AI for improving customer services, analyze data, predict performance to automate workloads, trading and more. The trend of AI application and adoption still does not respond adequately to rapidly evolving intelligence capabilities. Also, businesses often may foster an environment of mistrust and animosity towards each other within respective industries and nations. This is perhaps a reason that prevents a common approach to data collection and information access. Moreover, many countries lack the necessary digital data infrastructure. The lack of digital infrastructure, in turn, discourages data opportunities and innovations, making it challenging to address business data and information needs adequately — leaving businesses with outdated data, information, and intelligence.

While AI has the potential to transform businesses, business models, and commerce across nations, concerns about geopolitics resulting in protectionist data practices and resistance to sharing data and information may thwart its potential. As a result, the possibility of creating and adopting large aggregate data pools and practices at local, national, and global levels remain unclear.

AI is not only changing how businesses work; it is also fundamentally transforming the traditional thinking and meaning of collaboration, competition, and innovation. While most AI initiatives create competitive advantage by perceiving an entirely new opportunity, enhancing current efforts, supplying a market segment that others have ignored, or creating new markets, connected devices that feed a constant stream of data about functionality, usage, production, needs and more to a central location will create even more fascinating competitive transformations. That brings us to an important point: As the Internet of Thing integration will allow for the development of environments where users and consumers can interact, how will it change business models further, as it will be possible to design experiences over products?

Security Risks

The growing weaponization of AI has made security a critical issue across nations. AI is currently an area where almost no rules of engagement apply, and each country will face difficulties in creating security from algorithms and defining international law. While algorithms have no borders and no global regulations or regulatory body, data has its origin, ownership, and boundaries. There are many — including nations, states, freelancers, criminals, and terrorists — that consider algorithms outside the pale of global jurisdiction. While some agreements have emerged concerning cyber-crime, interpretation of AI warfare remains outside any binding legal obligations. In the absence of a consensus on AI norms, every business model and business is at risk.

What Next?

Artificial intelligence is an integral part of the future that is coming to each business entity across nations. The emerging trends in AI-driven automation reflect significant shifts of players and actions in the AI sphere that speak to the reconfiguration of interests, influence, and investments in global business politics. While rapidly automating businesses present promising opportunities, they also present significant security risks. As the future of AI-driven business transformation is closely tied to how nations manage their significant data capabilities from across cyberspace, aquaspace, geospace, and space (CAGS), there is a need to place a strong emphasis on advancing data initiatives to gather more information to evolve the AI landscape further.


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