The Early Days of AI and How the $100B+ Creator Economy is Shaping Big Tech

The Early Days of AI and How the $100B+ Creator Economy is Shaping Big Tech

In recent years, we have witnessed significant advancements in artificial intelligence (AI) and the rise of the creator economy. These two phenomena may seem unrelated, but they share common characteristics and have the potential to shape the future of big tech. In this article, we will explore the early days of AI and how it marks a new era in technology. We will also delve into the creator economy and its impact on big tech companies. By connecting these two seemingly disparate topics, we can gain insights into the future of technology and the opportunities it presents.

When discussing AI, it is essential to differentiate between the advancements we are seeing today and the previous capabilities of CNN/RNN/GAN models. Many business people view AI as a continuum, but it is more accurate to consider it as a step function in new capabilities and products. The launch of ChatGPT, for example, signaled the mainstreaming of AI and its potential for new applications. However, we are still far from reaching peak AI usage or peak AI hype, as large enterprise planning cycles and building processes take time.

In these early days of AI, we can identify four waves of development. The first wave consists of companies native to the AI generation, such as ChatGPT, Midjourney, Character.AI, and Stable Diffusion. These companies have gained significant revenue and user traction, paving the way for the next wave of startups and fast mid-market incumbents. The current wave includes startups that have launched on top of GPT-3.5/4, like Perplexity, Langchain, and Harvey. Additionally, some multi-billion dollar companies, such as Navan, Notion, Quora, Replit, and Zapier, have quickly adopted AI-powered products.

Looking ahead, the third wave of AI startups is currently being founded. This wave is expected to introduce new formats like voice and video, as well as explore natural language applications in various industries. Companies like Eleven Labs, LMNT, LFG Labs, and Braintrust will contribute to incremental experiences and expand the possibilities of AI. Finally, the fourth wave, anticipated to arrive in 2024 or 2025, will see the first big enterprise adopters of AI. These companies, apart from the early adopters like Microsoft, Adobe, Google, and Meta, will bring fully developed products to the market.

Shifting our focus to the creator economy, we discover a parallel narrative of growth and transformation within big tech companies. Influencers, who generate high-traffic content, often felt frustrated by the limited rewards they received from big media platforms. The power dynamic shifted from platforms to creators, prompting big tech companies to introduce new features and monetization options. For example, Facebook allows users to tip creators through its native tipping system called Stars. It also plans to enable creators to charge for access to Live Audio Rooms and has established an Audio Creator Fund. Substack and Revue, two popular platforms for newsletters, take a percentage of creators' earnings.

Amazon, another major player in the creator economy, has developed various strategies to cater to influencers. Its Amazon Live Creator app enables influencers to earn commissions through livestream sales. Additionally, Amazon's game streaming service, Twitch, has become a hub for creators to monetize their content. Twitch generates revenue through subscriptions and aims to increase its ad revenue to further support creators. The livestream shopping trend has also proved successful, with platforms like Taobao Live reaping billions of dollars in sales during shopping festivals.

Microsoft, too, recognizes the importance of the creator economy. CEO Satya Nadella emphasizes the balance between consumption and creative expression. He envisions the next decade to be about democratized creation, where individuals have the tools and platforms to bring their ideas to life. YouTube, with its vast reach and revenue potential, remains a popular platform for creators. Although it takes a significant cut from ad revenue, YouTube's extensive user base makes it an attractive choice for creators.

However, the platform fee imposed by big tech companies has been a point of contention in the creator economy. Many creators believe that a lower fee would allow the industry to thrive even more. For instance, Gumroad founder Sahil Lavingia claims that the creator economy would be ten times larger if Apple's fee was reduced from 30% to 3%. This suggests that high platform fees hinder the growth and potential of creators.

In conclusion, the early days of AI and the rise of the creator economy are reshaping big tech companies in profound ways. AI represents a new era of technology, with multiple waves of development yet to come. The creator economy, on the other hand, empowers individuals to monetize their content and build independent brands. As big tech companies delve deeper into the creator economy, their focus will likely be on retaining users and expanding their own platforms. However, creators may seek platform-agnostic solutions to avoid dependence on any single platform. To capitalize on the opportunities presented by AI and the creator economy, here are three actionable pieces of advice:

1. Embrace AI as a transformative force: Whether you are an individual creator or a large enterprise, it is crucial to recognize the potential of AI in unlocking new capabilities and products. Explore how AI can enhance your current offerings or enable you to enter new markets.

2. Diversify your platform presence: While big tech companies offer significant reach and financial rewards, it is wise to build a presence across multiple platforms. This strategy ensures less dependence on any one platform and allows you to leverage different audiences and monetization options.

3. Advocate for fair platform fees: If you are a creator, join the conversation surrounding platform fees and advocate for fairer percentages. Lower fees can significantly impact the growth of the creator economy and benefit both creators and platforms.

By understanding the early days of AI and the dynamics of the creator economy, we can navigate the evolving landscape of big tech and seize the opportunities it presents. As AI continues to advance and the creator economy expands, innovation and creativity will shape the future of technology and the way we interact with content.