Key take-away: Companies should be building AI Agents now with a developer team & business leader to understand the implications they bring to how we will work going forward.
AI Agents will be like excel spreadsheets. Anyone will be able to make them.
Prompting - telling AI what to do - will be as important as entering a formula into the cell of a spreadsheet.
The more advanced one is with prompting the more advanced the AI Agent one can make. However, unlike spreadsheets the AI Agents will be able to 1) converse with humans and 2) work with other agents.
The way we work will change, new business models, pricing models and org structures will be developed.
In August, 2011 Marc Andreessen published an article in the Wall Street Journal with the title “Why software is eating the world” in which he shared his theory that “we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy.”
He cited the following examples:
Well, 13 years and many articles later, Marc Andreessen, in a new article, recently said,
“Every white collar worker will have an AI Copilot,
then an AI Agent.”
Let's put some definitions to these terms before we go on.
Back to Marc Andreessen's recent quote, The idea that every "white collar" worker will essentially have an AI assistant isn't a farfetched one. Most people already use an AI Assistant (Siri, Alexa, Google) for simple daily activities.
The release of ChatGPT though brought an ai assistant that could code and accomplish complex tasks putting it and other LLM's on the path to be an AI work assistant.
Usually incumbents are slow to move during technology disruption, but in the case of AI disruption scale matters for incumbents.
The chart below shows how larger software companies have had greater stock returns to investors since the release of ChatGPT compared to their smaller peers. This isn't just about the hype cycle its also about AI strategy and speed to market.
The majority of the 16 companies in the >$20B EV cohort have released their own AI Assistant or in the case of Salesforce (CRM), Hubspot (HUBS) and Palantir (PLTR) they released an AI Assistant platform, where as the smaller cohorts have mainly integrated AI into their product.
Slide credit: https://www.platformaeronaut.com/p/enterprise-software-ai-pricing-power
Thomas Reiner author of Platform Aeronaut argues that "the benefits of scale, are an entrenched customer base, and most importantly a ton of unique data stands to argue that the larger players will continue to benefit."
I actually think the advantage companies at scale have is their capacity specifically in terms of cashflow operations and talent.
Companies at scale:
Companies not at scale:
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The disruptors, OpenAI & Anthropic, clearly achieved first mover advantage as they are now valued at $154bn and potentially $40bn respectively. Pretty good for two companies no one new of two years ago.
The incumbents that were already at scale and able to to start shortly after the launch of ChatPGT got a least a twelve month head start of incumbents that were delayed at least six months.
What? Why 12 months?
The new law of the jungle is the law of AI scale which states that AI capacity doubles every six months. So the first movers essentially got a 12 month advantage over the fast followers and a 24 months advantage over the early adopters.
"AI capacity doubles every six months"
- the Law of AI Scale
With capacity doubling every six months, a company that hasn't started building AI assistants, or AI Agents today is not 24 months behind but rather 48 months behind due to the amount a development team has to learn and grasp the possibilities. Companies that don't get started in the next six months will be 96 months (8 years) behind the first movers.
Luckily, there is hope!
The cloud giants - AWS, Microsoft, Google - have released tools to accelerate the development of enterprise grade AI Assistants and AI Agents. These no-code Agent builder tools simplify (not solve) the AI Agent development workflow.
AI Agent Tool links:
September 2024 Marc Benioff talked about how AI Agents will change the workplace.
A month later, Satya Nadella gave a more clear analogy to how AI Agents will change the workplace by comparing them with excel spreadsheet. He believes working with and creating AI Agents will be as natural as creating and using an excel spreadsheet.
“Just like how you could create an Excel spreadsheet that was a forecast,
you can now create AI agents.”
- Satya Nadella, CEO of Microsoft
What does it mean going forward if creating an AI Agent will become as easy as using a spreadsheet
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credit: https://foundationcapital.com/ai-service-as-software/
credit: https://www.growthunhinged.com/p/from-selling-access-to-selling-work
Satya Nadella, later in his keynote, went on to explain his new workflow, “I think with AI, and work with my colleagues at work” and went as far as to say it will become the new workflow for knowledge workers.
“I think with AI, and work with my colleagues at work”
- the new workflow according to Satya Nadella
New workflow comments are at the 8:00 min mark
Understanding the prompt, prompt sequencing, and agent workflow will separate basic, power and advanced users just as writing an excel formula, building a multi-tab model and connecting to an external database separate basic, power and advanced Excel users.
A popular youtube developer, IndyDevDan, declared,
“The prompt is the fundamental unit of knowledge work.”
Fundamental unit of knowledge work: 4:46 -5:16
If the last twenty years, knowledge work was about the ability to understand how to use a cell in Excel or influence the numbers that get reported in an Excel cell then the next evolution is understanding how to use prompts to build and work with AI Agents.
AI ROI = (Business Process Value x Volume) / AI Costs
Before you run off and get your company to tackle a high value business process or a low value process that has high volume I recommend a crawl, walk, run approach just to learn the workflow needed.
Once your development team has figured out the workflow & integrations it will be able to rapidly expand and improve its AI development capability and your AI ROI.
Remember, new business processes will emerge as the way we work is going to change.
In my next post i'll lay out the AI Agent Ecosystem. Don't worry it will be a shorter blog post.
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