AI will challenge and create business models at an unprecedented pace.
AI is the most disruptive technology we’ve experienced. It is reshaping business models, transforming living and working in ways we cannot yet fully conceive. As AI creates new possibilities, it simultaneously challenges many existing business models.
Startups and venture capital are already feeling the impact. AI enables entrepreneurs to build companies more rapidly and with fewer people, potentially reducing or eliminating the need for traditional venture funding. This shift pushes venture capitalists toward funding longer-term, riskier bets, extending their runway to liquidity and fundamentally altering risk profiles. While AI may not entirely break the venture capital model, its impact will substantially reduce the number of active VC firms and available funds. This shift is already visible in the decline of new venture funds and emerging fund managers.
However, startups and venture capital are just the beginning; every industry will face AI-driven challenges. Some sectors will attempt to resist by creating policies to limit AI’s disruptive effects. These policies will provide stability in some instances, but in others, they will merely delay inevitable transformations. Companies that rely heavily on regulatory defenses risk making strategic bets that might not hold in the face of AI’s rapid evolution.
The Innovator’s Dilemma is about to accelerate dramatically under AI’s influence. Leaders will grapple with the tension between preserving existing operations and embracing disruptive AI-powered business models. Courage will be essential, as always, in deciding when and how to pivot amidst rapid technological evolution.
Predicting when disruptive forces will reach a critical tipping point remains challenging. Some industries and business models will endure longer than others. Still, AI will inevitably challenge the capacity, scope, and timing across sectors.
AI itself is a fiercely competitive category race among technology companies seeking dominance. Yet AI’s ambitions extend beyond current categories; it will continuously explore and conquer new territories, creating entirely novel business models. These innovations will be both astonishing in their ingenuity and obvious in hindsight.
