AI is becoming more and more integrated into our daily lives with every year that passes by. Almost everyone in America has at least tried one type of AI. However, few people know how it works or how to use it. After reading this blog, you will gain an understanding of AI and how it can help or hurt your small business.

WHAT IS AI?

There are many different types of AI. We will be discussing generative AI. A generative AI model does exactly what it is named after: it generates. This is done through a narrow AI model: one that is trained to do specific tasks. For example, a narrow AI model that generates text does not generate images or codes. The part that makes AI tools so unique or scary, depending on who you are, is that generative AI can produce at a level that is similar to human ability.

AI EXPLAINED

The generative AI models today are essentially a building block of all the programs we already have in place. They came together to form the largest and most sophisticated LLM, large language model, which is known as GPT-4. The LLM models are trained by being fed huge amounts of data and analyzing it through software programs. As ARSTechinia said, “It’s hard to overstate the sheer number of examples that a model like GPT-3 sees. GPT-3 was trained on a corpus of approximately 500 billion words. For comparison, a typical human child encounters roughly 100 million words by age 10.” Some researchers say that the more data the LLM models receive, the more the models will actually learn the meaning of words and be able to reason. For example, in a study from researchers: “The researchers thought GPT-4 might have somehow memorized code for drawing a unicorn from its training data, so they gave it a follow-up challenge: They altered the unicorn code to remove the horn and move some of the other body parts. Then they asked GPT-4 to put the horn back on. GPT-4 responded by putting the horn in the right spot.” The researchers argued this showed that the newer models actually knew the meaning and concept of the word “horn” and how it relates to animals.

BENEFITS OF AI IN SMALL BUSINESS

Now that we have a basic understanding of what AI is and how it works, we can discuss how it can transform your business for better or worse. Small businesses can utilize AI in many different ways. AI can draft just about anything, from business plans to employment applications. This can be very helpful because busy business owners can now give the time consuming tasks to the AI. The human, who now has extra time, can improve productivity in another area of the business that the AI cannot do or is too costly for the AI to do. Furthermore, AI can help with marketing. Many entrepreneurs are not marketing experts and hiring marketing firms can be expensive. AI can do all of the marketing and will be constantly improving on the marketing every step of the way. The AI can make personalized marketing ads by collecting consumer data and applying it. AI can automatically generate content such as email campaigns, social media ads, and description content. Another benefit is improving retention of customers and customer care. AI tools can ensure smaller wait times as well as eliminating any mean or aggressive tones from employees to customers. In turn, the customers will learn to appreciate the small business more and keep coming back. Moreover, AI keeps getting better and better at mimicking humans. They are continuously upgrading their skills in accuracy and efficiency with every call. The last benefit I hesitate to even mention is replacing employees with AI. I hesitate because workers are people who need to be taken care of. However, the incentives for replacing employees with AI are too high to ignore. Employing an AI would mean that there are no taxes to be paid. An employer will not have to pay unemployment compensation, workers compensation, or social security. This can be a huge amount of money saved or used to further the small business. Lastly, there is not much law regulating AI, which means there is much room to argue and create precedent for what the business wants/needs. Precedent means that whatever your attorney for your business argues will then become law.

DRAWBACKS OF AI IN SMALL BUSINESS

The biggest drawback is what I briefly mentioned above: workers are people who need to be taken care of. Workers are humans with real emotions and real problems. Goldman Sachs estimated that AI “could expose the equivalent of 300 million full-time workers across big economies to automation, leading to widespread unemployment.”  As much as a business should prioritize profit, it should not do so at the cost of so many people’s livelihoods. Another drawback is cost and accuracy. While the more basic AI tools can be great investments, some of the more complex generative AI can cost anywhere from 500,000 dollars to 9 million dollars. This does not include the cost of repairs or warranty. Another drawback is even the most intelligent AI still makes mistakes. This is known as hallucinating. For example, ChatGPT cited to fake Supreme Court Cases in a lawyer’s brief. This was not from data that ChatGPT was fed, it was completely made up by the AI. This is why it is extremely important to check all work produced by AI. The last downside is that it is hard to build relationships with AI. People like having real conversations with real people. While the AI may be much better than the frowning employee, it will never beat the smiling one.

CONCLUSION

Choosing to incorporate AI in your business is a tough decision. A decision that is completely yours. Hopefully, this article gave you some insight on what AI is and how it can help or hurt your business.

Sources:

https://www.forbes.com/sites/charlesrtaylor/2023/08/09/how-artificial-intelligence-is-helping-todays-small-businesses/?sh=3591f441a482

https://arstechnica.com/science/2023/07/a-jargon-free-explanation-of-how-ai-large-language-models-work/

https://ig.ft.com/generative-ai/

https://hbr.org/sponsored/2023/03/3-ways-small-businesses-can-use-ai-to-drive-growth

https://www.forbes.com/sites/allbusiness/2023/11/17/how-small-businesses-are-using-ai-and-how-your-business-can-benefit-too/?sh=3679d1892344

https://web-and-mobile-development.medium.com/how-much-does-it-cost-to-build-artificial-intelligence-software-in-2024-fcc2fe11fde5#:~:text=AI%20Project%20on%20a%20Medium,from%20%24500%2C000%20to%20%249%2C00%2C000.

Sources for Photos:

https://technogeekscs.com/generative-ai-models-how-generative-ai-is-changing-creative-work/

https://www.skippet.com/post/4-practical-generative-ai-tools-to-enhance-small-businesses

https://www.ibm.com/blog/exploring-generative-ai-to-maximize-experiences-decision-making-business-value.