Impact on AI, verification and commercial due diligence

Since the launch of ChatGPT in late 2022, AI has captured the attention of people and businesses around the world. Although this technology has long been seen as very promising, it was a challenge for the future. Today, it’s touting itself loudly and catching companies off guard as they move to realize its exciting potential to automate processes and greatly increase efficiency.

One important aspect to consider is where investors are currently looking. This latest wave of AI is drawing early attention to start-ups and companies that are already using AI in their products and services (broadly called AI adopters). Another factor to consider is whether investors have paused investments, causing market illiquidity. This encourages investors to consider possible impacts and disruptions across the industry, update their commercial and technical due diligence approaches, and seek to avoid dangers and seize opportunities.

A new approach to content platforms

For example, since the emergence of large-scale language models (LLMs) such as GPT and its chatbot variant ChatGPT, and text-to-image models such as Midjourney, investors have shifted their approach to business models that include content platforms. I am reconsidering. LLM works at incredible speed, digesting vast amounts of information (either “contained” from internal data stores or pulled directly from the internet) to produce detailed overviews and insights, visual Not surprising given its ability to handle random input. Investors expect significant disruption to more complex content types such as stock image marketplaces and website builders.

Inevitably, this disruption to established business models turns into opportunity for some companies. Innovative models are developed to replace them, and challengers outperform or integrate with incumbents. In the short term, there may be a handful of “winners” in the AI ​​adoption space. But it’s wise to expect that these product offerings will probably be overtaken by his Google and his Microsoft on earth, and the outliers will be acquired and integrated into larger businesses in the medium term. . After all, it will be an interesting time to watch these innovators compete to establish market dominance and offer cutting-edge solutions.

Due diligence is important

When looking at more general businesses, not just AI companies, the starting point for any AI approach should be the same. The AI ​​genie is not going back in the bottle, eliminating time-consuming, inefficient, or manual processes wherever possible to optimize costs and free up employees for more interesting and engaging work. It almost certainly has the potential to run quickly. Here, it is important for investors to ensure that due diligence efforts can protect against any harmful impacts when assessing AI’s ability to disrupt, deliver improvements, and transform business value. .

For digital professionals, accurate and reliable information is essential to making informed business decisions. There are a wealth of potential data sources for AI to choose from, including specific financial data and the internet itself in the case of BloombergGPT.

However, when it comes to AI-generated content, the algorithms do not always provide the source at the time of generation, so the platform may lack a “built-in” way to immediately validate the information being displayed. It often happens. An even more detrimental AI habit is its ability to deliver plausible quotes that are completely fabricated or “hallucinating”. This poses a major challenge, as companies require complete trust in the data they handle.

Verifiable sources and important context

Without a verifiable source of information, businesses and individuals who rely on AI-generated content for decision-making purposes may make erroneous choices based on inaccurate or unreliable information. . This can have serious consequences, from lost opportunities to financial loss, reputational and legal damage.

It is equally important to consider the context in which AI is applied. For example, more highly regulated industries such as healthcare limit the degree of automation possible without human oversight. Similarly, individuals have no hesitation in rejecting sensitive AI in one area of ​​their life and trusting it in another (planning vacations, buying new clothes, etc.).

To avoid these risks, it is imperative that companies carefully evaluate the sources of AI-generated content they use in their work. Leaders should partner with AI developers using her LLM who demonstrate the highest degree of transparency in the citation selection and reasoning process. They also need to invest internally to insert a human review stage to verify the accuracy of AI-generated content before presenting it to clients. By implementing it, businesses can be confident that the information they provide is accurate and reliable.

Lack of clear ownership is a concern

The lack of clear ownership of AI-generated content is also a notable area. It can obscure who owns intellectual property rights to AI-generated content, leading to disputes over control. Especially for multinational companies, it is important to pay close attention to the final legal decision, as different jurisdictions have to consider different decisions.

Another potential mistake for companies using AI is that it’s important to ensure that confidential or confidential company information remains in-house and not simply fed back to AI model providers. Here, it may be important to put in place internal policies regarding the correct use of AI, such as anonymizing all data before processing or using locally deployed models.

All industries are contemplating what the future will look like once AI is properly integrated, but some industries will inevitably be shaped bigger than others. Such is the case, for example, in industries that develop narrow and deep expertise, such as law firms and law firms. They anticipate the likely impact of the democratization of knowledge by AI, and sooner or later may be prompted to invest and build on building that capacity and knowledge.

Toni Stork is CEO and Partner of OMMAX.