The AI Business Model is Wrong

AI decision support is potentially valuable to practitioners. Accountants might value an AI tool’s ability to draft a tax return. Radiologists might value the AI’s guess about whether an X-ray suggests a cancerous mass. But with AIs’ tendency to “hallucinate” and confabulate, there’s an increasing recognition that these AI judgments require a “human in the loop” to carefully review their judgments.

In other words, an AI-supported radiologist should spend exactly the same amount of time considering your X-ray, and then see if the AI agrees with their judgment, and, if not, they should take a closer look. AI should make radiology more expensive, in order to make it more accurate.

But that’s not the AI business model. AI pitchmen are explicit on this score: The purpose of AI, the source of its value, is its capacity to increase productivity, which is to say, it should allow workers to do more, which will allow their bosses to fire some of them, or get each one to do more work in the same time, or both. The entire investor case for AI is “companies will buy our products so they can do more with less.” It’s not “business custom­ers will buy our products so their products will cost more to make, but will be of higher quality.”