Companies and governments are investing heavily to build AI, but many don’t know what they’re buying — or how to use it
The sky is falling for anyone not getting into artificial intelligence (AI) immediately. If you build AI for your business, you’re going to revolutionize the industry by saving huge amounts of time, boosting efficiency, and raising productivity, and it’s only going to get better over time. Just look at how good ChatGPT is now: You give it a prompt, and it spits out 700 words like it’s nothing. Evangelists spread this gospel from every corner. Businesses and governments alike see dollar signs.
There’s just one problem: Many of the leaders at these organizations don’t actually understand AI. The hype around the technology has them exploring how to build AI rather than how to use it in practical ways. By failing to cover their fundamentals, these leaders risk burning time and cash on AI investments that don’t pan out. So, in the interest of saving both, let’s take a deep breath and a deeper look at what AI is and what it can do for us.
What Is AI?
Underneath the shiny, marketing-buffed exterior, AI is an application like anything else. That means it takes servers, data, networking, and software to build AI successfully.
Let’s take ChatGPT as an example. This bot works by crawling the internet to index the contents — just as Google Search does — and then store huge chunks of it on developer OpenAI’s servers. The bot then examines all that language to learn syntax, usage, and facts that help it mimic human writing. When you prompt ChatGPT, it accesses those servers, chews through a bunch of data, and returns it to you as a big block of text.
The classic components of an application are all there. Servers host ChatGPT’s data, networks connect those servers, and software pulls it all together into text for users to read and use. That makes it fundamentally the same as your human resources or payroll apps. The only difference is in its workload.
How to Build AI Infrastructure
At this juncture, business leaders need to look past the hype around AI and treat it like any other application. The apps may do some of the work for you, but if you plan to integrate an AI solution, you will need to invest in infrastructure.
Outsourcing vs. Going In-House
Whether it’s storage, cybersecurity, or AI, implementing a new solution means examining whether or not to outsource its infrastructure. In each case, a business has to answer for itself by evaluating the expected return on investment of either option. When it comes to storage and cybersecurity, we have an ocean of data to pore through about how to provision infrastructure. We have a strong sense of what benefits and drawbacks we can expect from different deployment methods. That leads to smarter business decisions and more efficient operations.
AI is a different story. Its use cases in business are still nascent. As a result, we simply don’t have the data we need to determine whether it’s more cost-effective to build AI infrastructure in-house or to rent it from tech giants like Google. Moreover, it will be a long time before we have that data. And there’s going to be a lot of money burned between now and then.
The Case for Letting Others Lead
Despite the enthusiasm for impressive AI deployments like ChatGPT, it’s still not clear exactly how this technology will unlock the efficiency gains executives are looking for. That won’t stop them from looking. Lots of people have lots of ideas about how AI can save time and money, but they know very little for sure. Leaders in the space will likely spend billions of dollars and make tons of mistakes before they perfect the formula for AI deployment. For giant corporations, that kind of investment may be worthwhile. But for most businesses, it will prove much more cost-effective to adopt a wait-and-see approach.
Imagine a banking giant like Wells Fargo, for example. It could spend $1 billion on AI just to see $100 million of value. That return may grow over time, but the initial costs would be ruinous for a smaller company. It’s far more efficient for that smaller company to wait until the use cases have become clear and begun to demonstrate value. That way, they can invest less upfront and still see similar returns.
Think of AI like a bridge under construction via trial and error. Deep-pocketed interests can afford to send their goods across the bridge over and over despite the risk of a bridge collapse. If a collapse comes, they can eat the cost of lost goods and then use what they learned to make the bridge a little better. Over a long enough timeline — and with sufficient lost goods — they’ll come up with a great bridge. But in the meantime, it makes more sense for the rest of us to head downstream to the ford. It may take a little longer, but it’s significantly safer. Then, once the infrastructure is in place, we can swoop in and benefit from their investments at a lower cost.
How to Plan for the Future
Even if you’re not investing in AI immediately, there are still ways you can prepare for its widespread adoption. The most important thing you can do right now is consider what, specifically, you want AI to do for your business. What are the processes that seem ripe for efficiency gains? Where are the simple, repetitive tasks that could be handled by AI? Create a plan for how you might integrate AI technology. In each case, be sure to clearly outline how it will deliver increased business value. By doing so, you can position yourself as the smart money coming to capitalize on AI.
Build Efficiency Through Modernization
For many businesses, AI’s promise lies in its ability to increase efficiency. Budgets are stretched thin, and organizations of all sizes are looking to do more with less. While you wait for AI to realize that promise, there are plenty of ways to up efficiency. From Hybrid Cloud Infrastructure to Unified Communications as a Service, Roundstone Solutions can put you in touch with best-in-class vendors ready to get you the biggest return on every dollar spent. Contact us today to learn more.
Tim Joyce, Founder, Roundstone Solutions