Turn Generative AI from an Existential Threat into a Competitive Advantage

How to factor the new technology into your strategy

by

Scott Cook,
Andrei Hagiu,

and

Julian Wright

by

Scott Cook,
Andrei Hagiu,

and

Julian Wright

From the Magazine (January–February 2024) · Long read

Matilda Temperley

Summary.

By making it vastly easier and cheaper to improve or create products and services that previously required significant human labor and creativity, generative AI has the potential to disrupt or even commoditize many businesses.

Some companies will be able to gain an edge by leveraging publicly available generative AI tools better or faster than their competitors. But that advantage will be only temporary, and using the tools will soon become table stakes.

This means established companies will have to rethink their business strategies and find new ways to add value to their offerings. In this article, the authors consider which types of businesses have the greatest potential to gain competitive advantage from generative AI and which are most likely to be disrupted. They also offer guidance for implementing AI across three levels of sophistication that correspond to an increasingly powerful advantage.

Idea in Brief

The Problem

Generative AI has the potential to disrupt or commoditize businesses whose offerings previously required significant human labor and creativity. To compete, many firms will have to rethink their strategies.

The Table Stakes

Some will be able to gain an edge by leveraging widely available tools better or faster than their competitors. But that advantage will be only temporary, and using the tools will soon become table stakes.

A Differentiated Solution

Turning AI from an existential threat into an opportunity involves implementing generative AI at increasingly sophisticated levels that yield a stronger and more sustainable competitive advantage.

By making it vastly easier and cheaper to create or improve products and services, generative AI has the potential to disrupt or even commoditize businesses whose offerings previously required significant human labor and creativity. To compete, many businesses will have to rethink their strategies and find new ways to add value for customers.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

SC

Scott Cook is a cofounder and the chairman of the executive committee of Intuit.
Andrei Hagiu is an associate professor of information systems at Boston University’s Questrom School of Business.
theplatformguy
Julian Wright is the Lim Chong Yah Professor of Economics at the National University of Singapore.

Turn Generative AI from an Existential Threat into a Competitive Advantage

Idea in Brief

The Problem

The Table Stakes

A Differentiated Solution

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