Is AI a necessity or a differentiator for startups?

Welcome back to Ask About AI, your digital panel dedicated to demystifying AI use in the startup world. 

Each month, your questions about using AI in business are answered by four experts: Paul O’Neil, EMA’s head of legal, consultancy and general counsel; Madeline Newman, executive director at AI Forum NZ; Ming Cheuk, co-founder and CTO of AI agency Element X, and, of course, the incomparable ChatGPT.

In case you missed it, our first instalment, tackling how to get started with AI even if you’re not tech savvy, can be found here. Key message: take the time to get familiar with it free of pressure. 

This month, we’re asking: is AI a necessity or a differentiator for startups?

But first, let’s catch up on some AI in business need-to-knows: 

• UK research firm Oxford Insights published its annual Government AI Readiness Index, ranking 193 governments worldwide. New Zealand – drumroll, please – came in at a smoking hot 49th. Check out Caffeine and BusinessDesk columnist Peter Griffin’s opinion piece here. In short, we could be doing better. 
• A new Massachusetts Institute of Technology (MIT) study found that AI is still too expensive to replace humans (feel free to let out that breath you’ve been holding). 
• The UN Secretary-General, Antonio Guterres, has called for governments to urgently “work with tech companies on risk management frameworks for current AI development, and monitoring and mitigating future harms”.
• The US Federal Trade Commission (FTC) started investigating the investments large companies like Microsoft, Amazon and Google are making into startups, signifying a step towards the development of US AI regulation. See more here.‍
• Early returns find investors are still keen on AI despite the tight market, with US$1.2 billion in funding announced so far. Watch this space. 
• And, of course, Sora – an AI model that can create realistic and imaginative scenes from text instructions – launched. Get familiar here.

Okay, let’s get into it – AI, do we need it? 

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Madeleine Newman 

AI is very much in the necessity camp for all – and it’s a differentiator you cannot afford to ignore.

The toolsets out there will help you amplify your resources (including you!), and as you are an entrepreneur, I’d be surprised if you would pass up the chance for free resources.

What is true for all companies – not just startups – is that if you choose not to use these toolsets, you will give your competitors an unfair advantage.

It’s a differentiator if it helps you do something your competitors can’t. This could be because it helps you to create better products, deliver better services to your customers, or simply turns you into a superhuman.

Aligned with a great vision and clear strategy, it can be a game changer.

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Ming Cheuk

AI has certainly created lots of new opportunities for startups to gain a competitive advantage by providing a solution to problems that were extremely difficult or impossible to solve before. 

However, not all industries or organisations have problems that require AI to solve, so the impact of adopting AI will vary.

Some will be forced to incorporate AI to stay competitive, such as those in the customer service software or content management space. This could be a Kodak situation for them. 

Others may want to incorporate it as a differentiator but may not be top of their customers’ minds so won’t see as significant of an impact.

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Paul O’Neil

AI is quickly becoming a necessity in any business – startup or otherwise – but while awareness around it is increasing exponentially, the ability to differentiate your business by coming up with creative and novel uses of AI still exists.  

Now is the time, while we are still relatively early in the AI journey, to absorb knowledge and options when it comes to AI and take advice around how to incorporate it into your business.  

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ChatGPT

Whether AI is a necessity or a differentiator for a startup depends on its industry and goals. 

AI is essential for data-driven decision-making, automating routine tasks, maintaining competitiveness, scaling efficiently and enhancing customer experiences. It serves as a differentiator by fostering innovation, enabling personalisation, improving efficiency, providing predictive insights and creating AI-first products. 

However, startups must consider resource allocation, market readiness, ethical implications and the maturity of AI technologies. 

Ultimately, AI's role varies: for some startups, it's integral to their business model, while for others, it offers a unique competitive edge.

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More about our panel:

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Madeleine Newman is the executive director of AI Forum New Zealand, a tech community promoting the economic opportunities raised by AI and supporting AI application in society. She brings a broad understanding of AI policy and practice to the discussion. 

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Ming Cheuk has been involved with AI for over a decade. His company, ElementX (Previously Spark 64), is dedicated to assisting businesses leverage AI. He also serves as an executive council member for the AI Forum NZ. 

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Paul O’Neil is the head of legal, consultancy and general counsel at the Employers and Manufacturers Association (EMA). Having recently been involved in EMA’s ‘AI Show’, he brings a legal angle to the AI discussion. 

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Need it any introduction? Launched November 2022 by Open AI, ChatGPT is based on a large language model, allowing users to have human-like conversations with a chatbot. 

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If you have an AI question you’d like answered, reach out at mary@caffeinedaily.co

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