Scale is Now a Liability

AI has gone through cycles of hype and disappointment over the past few decades, often falling short of broad adoption due to the significant requirements it posed. To build potent AI solutions, three key assets were indispensable: capital, expertise, and data.

Many AI initiatives failed to yield the projected ROI due to the steep investment required. Consequently, AI had notable impact primarily within big tech platforms, which had ample supply of these three resources, and in contexts where financial losses were tolerable for the sake of strategic goals.

However, the AI landscape has undergone a sea change. Individuals and small teams, even those without abundant capital, specialized expertise, or vast data — none of the previously required assets — can now construct and utilize formidable AI solutions. The early adopters are typically seed or Series A-funded start-ups, which are integrating AI into their products via open APIs and services for GPT and other generative models.

This evolution poses a vital question for enterprises: what does it mean for you? Intriguingly, scale, which was a prerequisite to build the previous generation of potent AI solutions, could now be a liability. If any company can develop similar capabilities, your competitive edge dwindles. In a rapidly changing and increasingly powerful technological landscape, scale might even become an outright liability.

The key to success is to identify and leverage the unique assets you possess, such as existing customers, market expertise, or strategic relationships. Take inspiration from the US military, which had to become highly adaptable and flexible in the face of the rapidly evolving Global War on Terror. The OODA Loop (“Observe, Orient, Decide, Act”) could serve as a useful framework.

While such a swiftly changing competitive environment may be unfamiliar to traditional sectors like banking, insurance, and healthcare, large tech companies have been warding off agile start-ups for years. If you hone your expertise, optimize your processes for a rapidly changing world, and strategically acquire competitors when necessary, you can not only survive but also thrive in this new era.

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Prolego is an elite consulting team of AI engineers, strategists, and creative professionals guiding the world’s largest companies through the AI transformation. Founded in 2017 by technology veterans Kevin Dewalt and Russ Rands, Prolego has helped dozens of Fortune 1000 companies develop AI strategies, transform their workforce, and build state-of-the-art AI solutions.

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