Three CEOs And A Venture Capitalist On Generative AI’s Benefits Versus Price

The word ‘value’ is oft-discussed in the world of business — but what does it mean? Where is the value in Generative AI? What should business leaders do about it? With help from three CEOs and a venture capitalist, here are my answers:

• Value = Benefits/Price. Value determines the winner of the battle for a customer’s money. While the details vary, to prevail in contested markets, a company must offer customers the most benefit for the buck.
• GAI Value = (Lower Costs + Better Service + Happier Employees)/Price. The value in generative AI comes from shifting mundane tasks — such as responding to customer service questions or automating basic coding — from people to machines. Such high-value GAI applications lower a company’s operating costs, give customers a reason to keep buying, and boost employee satisfaction.
• CEO’s GAI Value Agenda. Business leaders must listen to customers and employees to gain insight into what causes them pain. Next, they must invest in GAI applications to do a better job than rivals at relieving that pain. Unlike in the dot-com era when startups had an advantage, leaders must win against incumbents who enjoy a natural advantage in GAI applications.

What GAI Must Do To Provide Value

GAI is “overhyped in the short-term,” Amit Walia, CEO of data integration software provider Informatica, told me in a July 20 interview. Others I interviewed agree it is too early to tell which GAI applications are likely to be most valuable since most companies are still experimenting with them.