AI and its Long Term Dominance
At a time when big companies are pouring billions of dollars into the AI domain, a notable point is how smaller startups are going to fare at this point.
A recent survey conducted by Harvard Business Review provides some intriguing insights into their daily working style (of AI startups). After a detailed analysis, it comes to the knowledge that the current market is a robust, competitive one, but it is also restricted at certain places.
The data that AI startups use generally comes from their own customers. In the survey mentioned above, 80% of the respondents have used their customers’ idea, including data about their customers’ customers and users. Nearly two-thirds (65%) have used third-party public data, including government data, data scraped from the internet, and public benchmarking data.
Half the firms (50%) also use their own proprietary data, which they almost always use from other sources. Only 6% depend solely on their own proprietary data. Most of the startups retain secondary rights to customer data. That is to say, they act as aggregators, collecting data from multiple customers.
Those startups selling commercial AI applications, also play a unique role in providing solutions to mid-sized companies who can’t afford to develop their own AI. Large MNCs making big AI investments usually invest for their own use. However, these projects often require large fixed investments.
Due to this, small and medium-sized companies often back out to make comparable investments, and most of the times, they lack the talent to do so. This is where AI startups come to play. Effectively speaking, the startup’s development costs are shared all across their customers.
Almost half of the AI startups sell to midsize firms (51-1000) employees. To state a comparison, only 26% of employees in the US work at midsize firms.
Industries Where AI Startups are Getting Funded.
AI startups also sell to a range of industries with the likes of agriculture, law enforcement, government, software and IT, finance and retail. In this sector, the market is pretty healthy and competitive and provides a lot of opportunity to newcomers.
Startup developers of commercial AI often operate in a competitive market. Their level of competition is based on the data available to them, and also to meet a market need for AI applications, especially for midsize companies. This, in turn, would enable those companies to compete with larger companies. There are certain barriers in the system, but the overall market is a robust and competitive one.
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