Legacy companies are going to struggle with AI for two reasons: 1/8
First, they are risk-averse. Deep learning models are black-box, and it’s kind of impossible to explain why a model produced a specific output. Sometimes the output is totally unexpected. Sometimes it’s offensive. Remember Tay, Microsoft’s offensive chatbot? 2/8
This will inevitably confuse and anger the risk-averse middle managers at legacy companies. They will default to “no” because their incentive structure rewards stable, low-risk execution. 3/8
Founder-led tech companies tend to be more aggressive and risk-tolerant. They will push the limits and reap the benefits. 4/8
Second, legacy companies will struggle to attract top-tier talent. There are (maybe?) a few thousand great AI practitioners. Top tech companies know how to recruit, retain, and maximize the productivity of top-tier talent. Legacy companies don't. 5/8
Top tech company culture promotes autonomy. They pay very well (over $1mm for good engineers) and have cool brands. And networks are insular in that great talent follows great talent. 6/8
Conversely, I doubt that legacy companies will pay 27 y/o engineers $1mm+. Nor will they give them unlimited vacation or the autonomy to work on problems they find interesting. 7/8
But they will happily pay a management consulting firm $25 million for an 85-page PPT on the importance of AI! 8/8
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