The New Business of AI

(Excerpt)

“Deep learning costs a lot in compute resources, for marginal payoffs.”

It’s important to note that the AI business model differs from a typical SaaS business model in the sense that there are higher cloud/compute resources costs associated with building models and execution. The AI business model is costly to maintain. Cloud costs can reach 25% of revenues, which is quite a lot. Another aspect of the AI model that differs from a traditional SaaS business model is that the “human involvement” component is greater. As a result, moving between “domains” can prove costly. Improving the AI business model generates marginal benefits in the sense that you can spend a lot and experience relatively small improvements.

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