The Future of AI: From Networks to Algorithms

The Future of AI: From Networks to Algorithms

In the age of artificial intelligence (AI), the possibilities for innovation and disruption are endless. With advancements in foundation models, anyone can now build an AI company. However, the true strategic advantage lies in the applications that can coexist with multiple systems of record and collect valuable data. This shift from networks that connect people to algorithms that connect people to content is transforming various industries.

One notable impact of AI is the evolution of social networks. We are witnessing a transition from AI-powered networks, where people post and consume content for and by the algorithm, to AI-only networks, where personalized content is created for each individual. This shift is reminiscent of "The Infinite Article," a concept that explores the infinite possibilities of AI-generated content. As AI continues to advance, it will not only reshape social networks but also impact other "bits only" networks such as dating apps, gaming platforms, labor marketplaces, and specialized skill marketplaces.

Platform shifts often create opportunities to rebuild large categories of software. Take, for example, the shift to cloud-based productivity tools. Despite Microsoft's dominant position with Microsoft Office and Azure, they left a significant gap in the market for collaborative software. This gap was quickly filled by products like GSuite and Figma. Start-ups looking to enter established software categories should identify angles where incumbents cannot compete, leveraging emerging technologies such as AI to gain a competitive edge.

In addition to software categories, AI has the potential to revolutionize industries that heavily rely on text-based coordination and personalized interactions. Wealth managers, insurance brokers, and mortgage brokers, for instance, can benefit greatly from AI-powered co-pilots. These "branded" salespeople work across multiple applications, coordinating various tasks through text-based communication. By leveraging AI to increase efficiency and personalize interactions, these professionals can greatly enhance client retention.

The impact of AI extends beyond software and sales. Google, for instance, is introducing a feature in Chrome 90 that allows users to create links to highlighted text on a webpage. This feature, already available on desktop and Android devices for some users, will soon be accessible on iOS as well. Users can simply highlight the desired text, right-click, and select "copy link to highlight." This generates a URL with a pound sign () that can be shared with others. This feature demonstrates how AI is transforming even the way we interact with web content.