AI is changing strategy, competition and our time.

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So far there have been two major eras in the history of computing. The first was the era of the PC from mid 70s to mid 90s. This was the heyday of IBM and then of Microsoft as they started to take over the world. This was the beginning of the desktop world with computers helping us calculate, write, and design.

The second major phase started in the mid 90s with the emergence of the commercial internet. With this, all these machines were connected and could communicate. This revolutionary change that has taken place over the last 20 years arguably caught many companies by surprise. 

Today we are at the beginning of the next major phase. Not only are these machines ubiquitously connected and communicating through the internet, they will soon all be able to think and learn on their own. This is a profound change; an era where every device will be able to make a decision on its own. We are just at the beginning of this change, a change where we are essentially adding a lot more brains to the planet.

There are many similarities to where we are now with artificial intelligence and where we were with the internet in the mid-90s. Back then, Netscape had just arrived, we had email and there were a lot of people nerding out on the technical details. But the impact of the internet was vastly underestimated by almost everyone. Right now, it’s like this in AI. There is a lot of buzz, a lot of popular journalism and a lot of technical progress but it’s only the leading companies who are investing and who are truly able to understand the power of AI. The rest is falling behind quickly.

Machines are learning and providing more personalized services all around us. Google’s searches are better targeted after several years of investing in machine learning. Facebook’s timeline and Amazon’s product recommendations are better targeted at each individual. Better targeting—more personalization—makes the services more addictive. More addiction means more revenue.

Over the past four years, Americans’ consumption of media and entertainment has increased by more than 10%. That’s an increase of 1 hour per day. Digging into the data is even more striking. Time with smart media is up 80% to over 4 hours per day. The biggest driver of this change is time with mobile which is up more than 2.5 times. The only category of smart media that’s down is internet over a computer which is down 50% in the last year alone. Clearly people have shifted their time to the easy accessibility and data rich AI-based applications on mobile devices.

All of this time equals money for the companies creating AI. And none more than the big five platforms. These companies all have their own approach to the market and to AI. Apple focuses on delivering experiences and they use AI with a very strong focus on privacy to make that experience as personal as possible. Google’s focus is on delivering information to everyone around the world and they use their AI to analyze the vast richness of internet data to be able to provide the actual data that each individual wants. Microsoft’s focus is helping people be more productive at home and at work and they’re applying AI across a host of products to help you anticipate what you need before you know you need it. Amazon’s focus is selling and delivering things to you and they use AI throughout their business—from recommending products to solving for the most effective logistics to get that product to you. Finally Facebook’s focus is on making connections—to people and information—and they use their AI in ways to keep you connected and addicted so that you stay on your platform as long as possible.

Source: Sonder Scheme, Nielsen

One of the reasons AI is being taken so seriously by the big tech companies is because it is leading to what we call “the next prompt war.” In the PC era the prompt war was won by the C:\ prompt. In the days of MS-DOS, the C:\ prompt was how information on a computer was accessed. Even within a local area network, the C:\ was the access point and information was limited by what was accessible in this narrow domain. Microsoft won the PC era because they owned the C:\ prompt. But Microsoft lost the next war because they missed the next big prompt, the internet search window.

Google owns the internet search window of course and they have won in a much bigger fashion. The search prompt war wasn’t just about accessing what information was on your computer, it was about accessing all information across the world. The question now is who will win the AI prompt war?

But the platforms aren’t limiting their AI efforts to just their core markets. Each company has expanded dramatically over the past few years into seemingly any market that interests them. And their AI strengths are one of the key reasons they are winning at almost anything they try.

Every other company should take heed of these threats and start figuring out their AI strategy as soon as possible. This isn’t a new technical capability that you can afford to just watch— this is a capability you need to embrace and understand.

The good news is that succeeding in the AI era requires the same thing as before: designing the best human-machine interface. In this course, we’ll help you understand AI technology and human-centered design and how to put them together to solve problems you’ve never been able to solve before. Welcome to the AI age.

About Sonder Scheme: We are on a mission to help humans win in the age of AI by making AI design easier, more inclusive, more ethical and more human. Through our workshops, learning journeys and the Sonder Scheme Studio, we enable people to use design thinking-based tools to create innovative, effective and ethical human-machine systems. Both offline and online, Sonder Scheme empowers companies around the world to design human-centered AI.

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