Which Growth Path for AI: PC or Internet?

It is not yet clear whether artificial intelligence is going to affect business models more on the pattern of the personal computer or the internet. For the most part, the PC primarily enhanced existing business models by improving efficiency and data management, while the internet enabled entirely new business models and revenue streams. 

To the extent that a smartphone is a mobile computing device, smartphones have enabled more personalized, location-aware, and always-on business models. Compared to the PC, the smartphone (assuming use of the internet as well) has enabled peer-to-peer sharing models, such as ride hailing.

But most of us might agree that the internet has produced the greater range of new business models, in part because it enabled new industries (search, social media, e-commerce, content streaming). 

Business Model	Description	Examples
Subscription-based Services	Recurring payment for continuous access to digital content or services	Netflix, Spotify, Microsoft 365
Freemium	Basic services for free, premium features for a fee	Dropbox, LinkedIn, Skype
Ad-supported Platforms	Free services monetized through targeted advertising	Google, Facebook, YouTube
E-commerce Marketplaces	Online platforms connecting buyers and sellers	Amazon, eBay, Etsy
Sharing Economy	Platforms facilitating peer-to-peer sharing of resources	Uber, Airbnb, TaskRabbit
Software as a Service (SaaS)	Cloud-based software delivery on a subscription basis	Salesforce, Slack, Zoom
Crowdfunding	Platforms for raising funds from many small contributors	Kickstarter, GoFundMe, Indiegogo
Digital Content Creation	Monetization of user-generated content	YouTube creators, Twitch streamers, bloggers
Affiliate Marketing	Earning commissions by promoting others' products online	Amazon Associates, Clickbank affiliates
Microtransactions	Small payments for virtual goods or in-app purchases	Mobile games, virtual currencies in apps

So the issue is whether AI mostly enhances existing business processes or is a foundation for entirely-new industries, much as the internet enables search, social media, content streaming or e-commerce. 

It is possible that both outcomes--automating existing processes and also enabling new industries--will happen. In the early going, AI might appear to be a tool for automating existing  business processes. Later, it might enable new industries we haven’t thought of, yet. 

So the evolution of AI in business is likely to follow a similar trajectory to the internet:

• Initial phase: Automating and optimizing existing processes.

• Intermediate phase: Enabling new business models within existing industries.

• Transformative phase: Creating entirely new industries and economic sectors.