The next gold standard is AI native

By Brian Peterson, Co-Founder and CTO at Dialpad.

  • 2 months ago Posted in

Not so long ago, being a ‘digital native’ organisation was considered the peak of business performance. Digital native companies offered speed, agility and flexibility that their counterparts – often encumbered with slow legacy technology – would need to work hard to rival. And yet, here we are today, experiencing the AI gold rush which is, in turn, transforming the meaning of business excellence.

AI is bigger than the last great disruption, the internet. The move to digitisation and digital transformation was a necessary half-step towards the move to AI. While some will now profess that the fifth Industrial Revolution is AI, AI is more exponential than the internet or the fake fourth Industrial Revolution, digital transformation. The dawn of the true fourth Industrial Revolution begins with AI. And so this begs the question, is ‘AI native’ the new gold standard for businesses?

What does it mean to be AI native?

To answer this question, we need to first understand exactly what it means to be a ‘digital native’. Digital natives, as defined by IDC, are businesses where “value creation is based and dependent on the use of digital technologies, from how processes are run to the products, services, and experiences it provides”. Essentially, digital natives are businesses born in the cloud, unencumbered by the legacy technology weighing down their long-standing counterparts.

A great example to consider is a fintech challenger bank that was founded, let’s say, ten years ago. Compare this then to a traditional high street bank that was founded 100+ years ago. While the long-standing bank will have decades of data and experience beneath their belts, as well as many customers, they will also have physical records, manual processes and an old, legacy technology that slows them down. By contrast, the fintech will be nimble, flexible and able to rapidly pivot to market demands – simply because of how it came into existence.  

Now, let’s apply understanding to the concept of being AI native. These are businesses that operate with AI at the heart of everything they do - automating processes, optimising operations and driving innovation. Much like digital natives, agility is a defining characteristic of these companies, enabling them to respond swiftly to market demands and changes. However, AI natives can adapt and pivot even faster and are on the front line of the AI race. 

Navigating AI washing 

For companies looking to buy AI products and services, partnering with a genuinely AI native company will be hugely beneficial. However, as the AI boom continues, we’re seeing an increasing amount of AI washing. As part of this, we’ll likely see more companies claim to be AI native and set high prices for products allegedly leveraging private AI technology, only to later reveal they rely on a third-party or are still in their conceptual phase. The reality is that few companies in the world are actually AI-native.

So, what is the actual value in partnering with an AI native company for AI services? A lot of it comes down to data. AI relies entirely on data to function, so it’s essential that companies prioritise robust data handling practices. Non-AI native companies may lack the expertise and infrastructure needed to ensure proper data encryption and storage. By comparison, companies built upon their own proprietary AI stack will have greater control over data, privacy, security, performance and cost – key topics of discussion by organisations and regulators currently. Additionally, partnering with an AI native should, in theory, ensure more accuracy. Why? Because, while public AI is trained off the entire world wide web of data, AI natives can train their models on just the data that is relevant - making it faster, more accurate and tailored to their customers.

Ultimately, by partnering directly with AI native firms, businesses can mitigate risks associated with data breaches and compliance violations.

Asking the important questions 

Beyond simply being AI native, buyers need to ask themselves: do I believe this vendor will continue to innovate? Investing in an AI product is also a vote to future-proof a business. As such, it’s not just about what the product does now, but how it will evolve—for instance, will upgrades be made available without requiring the buyer to migrate its data? Choosing a vendor with proven track records in the AI space is like applying a safety net to a tech stack, and, therefore the overall business. 

The advancing landscape of AI native companies highlights a pivotal moment in technological advancement and business strategy. Digital native companies, born out of the internet era, have demonstrated resilience and adaptability in leveraging digital tools to drive innovation, customer engagement, and market disruption. However, the emergence of AI native companies represents a new frontier, where artificial intelligence and machine learning are not just supplementary but foundational to their operations and decision-making processes.

As we look ahead, one thing is clear. Whether born out of the internet boom or the AI revolution, successful companies will be those that embrace change, foster a culture of innovation, and harness the full potential of technology to meet the evolving needs of customers and society at large. 

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