Today is the one-year anniversary of OpenAI’s launch of ChatGPT, which clearly has had an unbelievably remarkable global impact on awareness and activity related to AI.
I think this quote from this retrospective on the Netscape IPO of August of 1995 could just as easily apply to ChatGPTs launch: “There are occasionally events that signal the arrival of a new force in culture (say, the Beatles on The Ed Sullivan Show) or serve as the demarcation line between historical eras (September 11, 2001, for example). The Netscape IPO was just such a moment in time.”
And today, the announcement of ChatGPT on 11/30/22 is also just such a moment in time. The final line of the retrospective could also be rewritten for AI: ChatGPT brought AI into popular consciousness and signaled the centrality of AI in the digital age.
I remain convinced that there is a real parallel between the internet in 1995/96 with AI in 2023. Netscape was the signal for the start of the internet revolution but its timing was such that the first companies didn’t create their first budgets to invest in the new technology until 1997. And then by 1998 most companies had budgets to create their internet strategies and invest in the technology.
Likewise today, many companies are finalizing their first-ever AI budgets for 2024 and most companies will have budgets to create their AI strategies and invest in the technology in 2025. In other words, January 1st will be the end of ‘crossing the chasm’ and the start of the ‘knee of the hockey stick’.
I believe that most Boards are asking CEOs what their AI strategy is and how they are going to compete in this new age of AI. My clear answer is for companies to embark on three intertwining efforts over multiple years that go deeper and wider over time around 1) AI strategy, 2) AI development projects, and 3) bringing AI capabilities in-house, all with positive ROI, as the path to AI enterprise transformation.
One note of caution. With all the focus on generative AI, it’s easy to slip into the trap of thinking generative AI is a synonym for AI. However, generative AI is simply the newest, shiniest, and least mature tool in the AI toolbox. There are a wide range of much more mature and much more impactful AI capabilities from a value creation point of view.
The key to getting started is to budget for a full year of investment in AI and use the roadmap developed out of the first strategy engagement, which needs to be deeply informed by the state-of-the-art of the full range of AI capabilities, to determine the roadmap of specific projects for the rest of the year.
The slide rule was a key business tool at the start of the mainframe revolution, the calculator was the same at the start of the PC revolution and the fax machine was the basis of commerce when Netscape went public.
One year ago today we had our ‘Netscape Moment’. Not budgeting for AI today is like having bet on the slide rule, calculator or fax.