It’s Jeremy here. First, I want to thank Sharon Goldman for her work as my co-writer on this newsletter over the past two years. Sharon, who normally writes the Thursday send of Eye on AI, is going off to become her own one woman media empire. We wish her all the best in her new venture.
I spent the first part of this week at Fortune Brainstorm Tech in Aspen, Colorado, where AI dominated every conversation, on stage and off. On Wednesday morning, I even hosted Fortune’s first Eye on AI breakfast, where it was great to meet some readers in the flesh. We discussed the reasons many companies are struggling to realize return on investment from AI.
A first principles approach is also critical for Kathy Pham, head of AI at ReviveHealth. She said we often optimize for the wrong thing. For instance, the question of whether parents should allow AI to read bedtime stories to their children varies depending on how parents view the purpose of story time. If some see it as simply a means to getting a child to sleep, then it might be fine to have AI read a bedtime story. But if the purpose is actually about the parent spending focused, intentional time with their child, then it would be defeating to allow AI to read the story. Businesses often have processes that have, over time, become divorced from their intended purpose and dropping AI into these processes can often fail to deliver value, she said.
Stephen Balaban, the cofounder and CTO of AI infrastructure firm Lambda, told the breakfast that he didn’t think AI was actually ready for many use cases outside of software development and that it was probably a mistake to push AI agents into other parts of a large company. But he also noted that until six months ago, AI agents also weren’t capable of autonomous software development. Now they are. And he said companies should start preparing now for the moment in the coming year or two when AI models would be capable enough to power agents in other domains. He also said that businesses were rightly demanding that services firms start charging for outcomes rather than for the amount of headcount they use to staff a project.
Wen Sang, the cofounder and chief operating officer at Genspark, an AI unicorn that markets systems of AI agents to specific professional verticals, said that enterprises should look for easy wins that can drive revenue. He used the example of advertising firms that have shifted from hiring artists to produce static storyboards for pitch meetings to instead using AI to create video prototypes of a television ad campaign. The result is an increased chance of winning business at less cost than it took to produce the old story boards.
