{"id":13509,"date":"2025-06-22T19:44:43","date_gmt":"2025-06-22T11:44:43","guid":{"rendered":"https:\/\/dollarsandsense.sg\/business\/?p=13509"},"modified":"2025-06-22T19:44:45","modified_gmt":"2025-06-22T11:44:45","slug":"tech-analyst-benedict-evans-companies-ready-for-ai","status":"publish","type":"post","link":"https:\/\/dollarsandsense.sg\/business\/tech-analyst-benedict-evans-companies-ready-for-ai\/","title":{"rendered":"Why Tech Analyst Benedict Evans Insists Companies Must Be Ready For AI"},"content":{"rendered":"\n

As a nerd who grew up on a diet of science fiction, including Isaac Asimov and Star Trek, I was transfixed by the seemingly endless possibilities of artificial intelligence (AI).<\/p>\n\n\n\n

The SuperAI<\/a> event held on 18 and 19 June, was like a dream come true. Over the two days, I saw a lot of exciting new technology and advances in AI. The bigger opportunity, in my opinion, was attending the keynote speeches of several people with years of insight into what AI means for us today.<\/p>\n\n\n\n

Read Also: SuperAI 2025 Showed How Exciting AI Agents Can Be, And Why Safeguards Are More Necessary Than Ever<\/a><\/em><\/strong><\/p>\n\n\n\n

One of the speakers who really impressed me was Benedict Evans. Evans is an independent technology analyst with over 20 years of experience analysing the mobile, media, and technology industries. His weekly newsletter has over 175,000 subscribers. His thoughts on AI and technology are sought after by multinational companies like Edelman, who recently appointed Evans as an Advisor to their global technology practice<\/a>.<\/p>\n\n\n\n

Evans\u2019 keynote, \u201cAI Eats The World<\/a>\u201d, starts with a challenge. He asked if AI is truly the future, or \u201cjust\u201d the next platform shift. In other words, is AI going to follow the PC, the World Wide Web, and the iPhone, all innovations 10 to 15 years apart, all the biggest technological advancements of their respective era? Or will AI be a more fundamental, transformational change for humanity.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

According to Evans, the answer to that question is probably going to be somewhere in the middle, and a lot of it is going to depend on what’s going on in the AI space right now.<\/p>\n\n\n\n

Capex Is Surging Exponentially<\/h3>\n\n\n\n

The first place to look is how much companies are willing to spend on investing in cloud computing and infrastructure. According to Evans, four tech companies \u2013 Meta, Alphabet (Google), Amazon Web Services, and Microsoft \u2013 spent about $220 billion last year, and are expected to spend over $300 billion this year.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Evans also singled out Microsoft for committing about 30% of their revenue to capital expenditure in 2025, contrasting that with most telecommunications companies, which tend to spend only 15%. This surge in spending has led to more AI models entering the market, all hoping to capture the attention of the bigger technology companies.<\/p>\n\n\n\n

New AI Models Are Catching Up To OpenAI<\/h3>\n\n\n\n

AI models have therefore become new commodities, according to Evans, due to an apparent lack of barriers to entry. While OpenAI, the parent company of ChatGPT, was once the clear market leader, the quality of other AI models has effectively caught up over the past two years. The launch of new DeepSeek models earlier this year demonstrated how relatively easy it was to compete with the top AI models, even though the reportedly low cost of $6 million has since been called into question<\/a>.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The challenge for companies therefore is not just building the best AI model but also doing so as cheaply as possible. But Evans believes that since AI models are essentially commodities, then a 19th-century economics concept known as Jevons Paradox comes into play.<\/p>\n\n\n\n

Evans is not the first to bring up Jevons Paradox; it was Microsoft\u2019s CEO Satya Nadella who first referred to it in the context of AI, following DeepSeek\u2019s effect on the stock prices of American tech companies in January. Jevons Paradox is the concept that lowering the cost of commodities through efficiency will lead to even higher usage, not less.<\/p>\n\n\n\n

As Evans points out, using the example of telecommunication companies, higher usage will not necessarily result in higher revenue or profits.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Generative AI Is Not Attracting Mainstream Usage Yet<\/h3>\n\n\n\n

According to Evans, generative AI is facing a contrast between adoption and usage. While ChatGPT has been used by almost 30% of people in the US, the number of daily users is closer to 10%. The problem that Evans therefore sees in generative AI is that this \u201clife-changing\u201d innovation is currently not changing that many lives.<\/p>\n\n\n\n

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The key fundamental shift, according to Evans, must be the company\u2019s responsibility. They need to find new ways to get their customers to use their product. Many companies, however, are justifiably hesitant about getting to such a stage. <\/p>\n\n\n\n

With concerns about security and privacy on one hand, the lack of expertise and high error rates on the other, it\u2019s unsurprising that corporations with the resources are slower to come up with new generative AI products. Generative AI may be an easier fit for some industries, like software, marketing, and customer support. However, regardless of industry, it will still take time to get a generative AI product from pilot to production.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The Big Question: Can The Question Be Changed<\/h3>\n\n\n\n

Throughout history, the pattern of technology has come in three stages. First, finding obvious use-cases to automate, followed by creating innovative new products to help the industry grow. The third and final stage is using technology to disrupt the industry entirely. However, Evans points out that achieving the right kind of disruption is important.<\/p>\n\n\n\n

Using the examples of how both Uber and Airbnb used software to disrupt the taxi and hotel industries, respectively, Evans demonstrated how the former replaced the practice of street hailing, while the latter created a new kind of demand without affecting the existing industry in the long term.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The challenge to companies is whether they will use generative AI to simply replace existing features, or will they create something entirely new. Evans used the example of asking ChatGPT for a chocolate chip recipe, which is currently what search engines are used for, and contrasted it with sending ChatGPT a photo of a fridge and asking \u201cWhat should I cook with this\u201d.<\/p>\n\n\n\n

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