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Silicon Valley’s Next Big Thing: Boring AI
Silicon Valley visionaries dream of making mega-money out of cool, futuristic products that thrill consumers, such as the metaverse, self-driving cars or health-monitoring apps. The duller reality is that most venture capitalists generate the best returns from investing in boring stuff sold to other businesses.
The Rise of SaaS
Over the past two decades, Software-as-a-Service has emerged as one of the most lucrative fields for VC investment, generating 337 unicorns, or tech start-ups valued at more than $1bn. But typical SaaS businesses, such as customer relationship management systems, payments processing platforms, and collaborative design tools, rarely quicken the consumer’s pulse. Investors love them all the same: they are capital-light and speedily scalable and can generate torrents of revenue from dependable, and often price-insensitive, corporate licenses.
The Future of AI
That may well be the case with generative artificial intelligence, too. For the moment, consumers are still dazzled by the seemingly magical ability of foundation models to generate reams of plausible text, video, and music and to clone voices and images. The big AI companies are also trumpeting the value of consumer-facing personal digital agents that are supposedly going to make all our lives easier.
AI Agents: The Next Big Thing?
"Agentic" is going to be the word of next year, OpenAI’s chief financial officer, Sarah Friar, recently told the FT. "It could be a researcher, a helpful assistant for everyday people, working moms like me. In 2025, we will see the first very successful agents deployed that help people in their day-to-day," she said.
Boring, But Lovable
While the big AI companies, like OpenAI, Google, Amazon, and Meta, are developing general-purpose agents that can be used by anyone, a small army of start-ups is working on more specialized AI agents for business. At present, generative AI systems are mostly seen as co-pilots that augment human employees, helping them write better code, for example. Soon, AI agents may become autonomous autopilots to replace business teams and functions altogether.
The Y Combinator Effect
In a recent discussion, the partners at Y Combinator said the Silicon Valley incubator had been deluged with mind-blowing applications from start-ups looking to apply AI agents to fields that include recruitment, onboarding, digital marketing, customer support, quality assurance, debt collection, medical billing, and searching and bidding for government contracts. Their advice was: find the most boring, repetitive administrative work you can automate it. Their conclusion was that vertical AI agents could well become the new SaaS. Expect more than 300 AI agent unicorns to be created.
Challenges Ahead
Two factors may slow the rate of adoption, however. First, if AI agents really are capable of replacing entire teams and functions then it seems unlikely that line managers will adopt them in a hurry. Managerial suicide is not a strategy taught at most business schools. Ruthless chief executives, who understand the technology, might impose brutality on their underlings in pursuit of greater efficiency. Or, more likely, new company structures will evolve as start-ups seek to exploit AI agents to the maximum. Some founders are already talking about creating zero-employee autonomous companies. Their Christmas parties may be a bit of a drag, though.
The Multi-Agent Ecosystem
The second frustrating factor may be concerns about what happens when agents increasingly interact with other agents and humans are out of the loop. What does this multi-agent ecosystem look like and how does it work in practice? How can anyone ensure trust and enforce accountability?
Conclusion
The future of AI agents is exciting, but also daunting. As AI becomes more pervasive, it’s crucial to ensure that it’s used responsibly and ethically. The potential benefits are significant, but so are the risks. It’s up to us to get it right.
FAQs
Q: What is the potential impact of AI agents on the job market?
A: AI agents have the potential to replace certain jobs, but they may also create new ones. The key is to upskill and reskill the workforce to take advantage of the opportunities presented by AI.
Q: How can we ensure trust and accountability in multi-agent systems?
A: We need to design AI agents that are transparent, explainable, and accountable. This will require significant advances in areas like explainable AI and human-AI collaboration.
Q: What is the future of work in an AI-driven world?
A: The future of work will be shaped by AI, but it’s not a zero-sum game. While some jobs may be replaced, others will be created. The key is to focus on human skills like creativity, empathy, and problem-solving, which will always be in demand.
