A Wave Of Billion-Dollar Language AI Startups Is Coming: Publishers and the Smiling Curve

A Wave Of Billion-Dollar Language AI Startups Is Coming: Publishers and the Smiling Curve

In the age of the internet, where video content dominates, the ability to effectively search through this vast amount of data is lacking. However, with the rise of AI that can synthesize data from multiple modalities, such as image and audio, the future of AI looks promising. This next-generation Natural Language Processing (NLP) technology has the potential to transform how humans write, revolutionizing one of civilization's most fundamental activities.

Large language models like OpenAI's GPT-3 have the power to generate coherent and creative content based on human prompts. These models act as highly advanced auto-complete tools, taking prompts and producing novel sentences, paragraphs, or even entire memos. The skillset required for good writing may soon expand to include the ability to effectively guide and coax AI into producing desired language.

Looking ahead, the next frontier in AI-augmented writing will be the AI's ability to independently generate novel written content based on guidance from human users. This means that in the future, writing content from scratch may be considered an artisanal craft, with AI playing a significant role in producing or augmenting the majority of the world's written text.

While AI advances in the field of writing, there is another market that is ripe for transformation – contact centers. These unglamorous back-office functions represent a staggering market, estimated to be worth $340 billion in 2020 and projected to reach $500 billion by 2027. However, these contact centers remain massively underdigitized, presenting a tremendous opportunity for software and machine learning to make a significant impact.

The concept of the "smiling curve" is useful in understanding the value-adding potential of various components in an IT-related manufacturing industry. In the case of the personal computer industry, the value chain's ends, such as critical component makers like Intel and Windows, capture more value than the middle part of the chain. This observation creates an ironic situation for companies like Acer, which operate in the undifferentiated middle and struggle to generate significant value.

Similar to the IT manufacturing industry, the publishing industry is experiencing a shift in value distribution. Traditional publishers find themselves stuck in the middle, while value increasingly moves to the ends. As more readers access content through platforms like Facebook, Google, and Twitter, the relationship between the reader and the publisher weakens. Readers are more likely to attribute positive feelings to the author of an article rather than the publication hosting it. This shift in value allocation is reminiscent of the IT manufacturing and smartphone industries.

Newspapers, in particular, face the paradox of reaching a global audience through the internet while struggling to generate sufficient revenue. The internet's free distribution model is available to all publishers, eliminating any exclusivity. Publishers no longer hold a monopoly on content distribution, and their value proposition to writers is diminishing.

In response to these challenges, successful writers and publications are pursuing strategies that focus on their unique strengths, accruing outsized value relative to publishers. The internet's ability to remove friction has eliminated the need for intermediaries, leading to the flow of value towards aggregators and individual writers or publications that differentiate themselves.

In conclusion, the future of AI in language generation and writing is promising. AI has the potential to transform how we write and produce written content. Additionally, industries like contact centers and publishing are ripe for disruption, with software and machine learning playing a vital role in their transformation. To navigate these changes successfully, here are three actionable pieces of advice:

1. Embrace AI-Augmented Writing: Develop an understanding of how to effectively guide and coax AI into producing desired language. Learn to leverage AI's capabilities to enhance your writing process.

2. Embrace Digital Transformation: If you operate in a contact center or publishing industry, prioritize digitization and the adoption of software and machine learning technologies. Identify areas where automation and AI can enhance efficiency and create value.

3. Focus on Differentiation: As value increasingly flows to the ends, differentiate yourself as a writer or publication. Develop a unique voice or niche that sets you apart from others. Emphasize your strengths and build a loyal audience that values your content.

By embracing these strategies and leveraging the power of AI and digital transformation, individuals and industries can thrive in the ever-evolving landscape of language AI and publishing.