AI in 2023: The Application Layer Has Arrived: Three Filters Needed to Think Through Problems

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Aug 09, 2023

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AI in 2023: The Application Layer Has Arrived: Three Filters Needed to Think Through Problems

In 2023, the application layer of AI is finally emerging, thanks to the solidification of the platform layer. This is an exciting development as it means that AI technology is becoming more accessible and its potential applications are expanding. Our world has changed dramatically in the past century, yet our brains have remained the same. However, with the rise of artificial intelligence, our capabilities are being enhanced in ways we couldn't have imagined.

Two primary forces have driven technology in the past decade: mobile and cloud. Mobile technology enabled the rise of large consumer internet companies and shifted digital advertising to mobile platforms. Cloud technology, on the other hand, facilitated the growth of software-as-a-service and made data the most valuable resource in business. These forces made the 2010s a successful decade for technology.

Now, artificial intelligence is poised to be the driving force in technology for the 2020s. AI has the potential to revolutionize various industries and provide personalized experiences at scale. For example, SHEIN, a shopping app, uses AI to quickly design its own trendy clothes based on competitor analysis and real-time demand forecasting. This demonstrates the power of AI in creating personalized experiences for consumers.

As AI technology advances, it is likely that richer media formats will become more popular. Just as Instagram's focus on photos made it more popular than text-based platforms like Twitter, we can expect that video-based platforms like TikTok will surpass photo-centric platforms. Eventually, immersive 3D experiences will become the norm. These advancements in generative AI are driven by improvements in image models, such as Stable Diffusion, which have greatly enhanced the quality of AI-generated content.

However, training larger AI models with more parameters is also becoming more expensive. It can cost millions of dollars to train a model with hundreds of billions of parameters. This poses a challenge for AI development, but it also highlights the potential for AI startups to become successful SaaS companies. SaaS companies have the advantage of predictable recurring revenue and high gross margins, making them an attractive business model for AI startups.

Building competitive moats will be crucial for AI companies to stay ahead of the competition. True tech differentiation is rare, so companies will need to find ways to keep users engaged and continuously refine their products. Network effects and iterative loops of user engagement and product refinement may be effective strategies for building competitive moats.

In addition to the advancements in AI technology, it is important to develop critical thinking skills to navigate the complexities of the world. Garrett Hardin's three filters for interpreting reality can help us think through problems and avoid fooling ourselves. The first filter is the literate filter, which involves understanding the true meaning of words and avoiding deceptive language. The second filter is the numerate filter, which requires numerical fluency to assess claims and make rational decisions. The third filter is the "And then what?" filter, which encourages us to consider the potential consequences and unintended effects of proposed solutions.

These three filters must be used together to effectively interpret reality and make informed decisions. No single filter is sufficient on its own, and they complement each other in understanding the world. By incorporating these filters into our thinking process, we can navigate the complexities of AI and other technological advancements.

In conclusion, AI is set to revolutionize various industries in the coming years. The solidification of the platform layer has paved the way for the emergence of the application layer, unlocking new possibilities for AI technology. Companies like SHEIN demonstrate the power of AI in creating personalized experiences at scale. As AI technology advances, we can expect richer media formats to become more popular. However, it is crucial to develop critical thinking skills and use filters like the literate, numerate, and "And then what?" filters to navigate the complexities of the world. By incorporating these filters into our decision-making process, we can make informed choices and harness the potential of AI in a responsible and effective manner.

Actionable advice:

  • 1. Stay updated on the latest advancements in AI technology and explore how they can be applied in your industry. Look for opportunities to leverage AI to enhance personalized experiences for your customers.
  • 2. Develop critical thinking skills and incorporate filters like the literate, numerate, and "And then what?" filters into your decision-making process. This will help you navigate the complexities of AI and make informed choices.
  • 3. Consider building a competitive moat for your AI startup by focusing on network effects or iterative loops of user engagement and product refinement. This will help differentiate your company from competitors and ensure long-term success.

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