AI adoption happens in three waves: making existing work faster and cheaper, improving quality, then building entirely new products. Video generation shows this: wave 1 is faster editing, wave 3 is real-time personalized content for each user. Companies need a portfolio strategy across all three because winning at wave 1 doesn't mean you'll win at wave 3.
Chapters
Starting with the first perspective, AI adoption will follow three waves, very similar to how we adopted previous revolutionary technologies like electricity or digital or mobile. Where the first wave is, we tend to apply the technology on the current way of working, looking for time savings, cost savings and overall efficiency gains, which you might recognize from the AI investments currently going on in your business. The second wave typically is looking at how can we leverage the technology to get to better quality, better output from the system. And whereas the third wave is looking at driving entirely new systems and really transformative shifts in a market, as we've seen with digital, for example, creating entirely new categories with the likes of Uber, Airbnb, Netflix, Teladoc, you name them. So typically what we do when a new technology emerges, and as said, we've seen the same in digital, is that we often copy paste what we already have, a physical newspaper, just a PDF version on the first screen, and only later we start to think about how to shape what could be personalized news feeds, etc. Etc. So the main point that we want to make here around the waves is that businesses looking at AI purely as a productivity tool in, in our minds are making this mistake. It is very much a productivity tool, but there's a lot more possibilities and that's what we would love to look at and talk through today. If we give one really practical example of the three waves, and if we think about video generation, for example, for entertainment or ad commercials or short videos, whatever the format is, is that the first wave is, can we use AI to do video editing faster and cheaper? That's very much what's currently going on. The next wave would be, can we actually get better quality video, more entertaining videos out of it? And then the third wave would be inventing an entirely new model based on the new technological possibilities. For example, can we have a real time, can we have real time movie generation for an audience of one, which could be your personalized TV series, which could be a personalized stream on TikTok, on Instagram, which could be new ad commercials that are generated in the moment just for you individually. And you will see that in the third wave. Actually, the investments that you've done in wave one and wave two typically don't necessarily matter for the third wave. So being successful in wave one is not at all a predictor of being successful in wave three. And what we want to advocate for in terms of AI strategy is to plan your strategy across the three waves with a vision around the third wave, build up towards that, and have a portfolio of investments not just in wave one, but across the three waves.
