Data is the new Oil : The question is who owns it and who sells it?
We have been hearing for quite some years that Data is the New Oil. But it triggers the next question of who owns this data and who extracts it and sells it.
The business models of Google and Facebook are based on supposedly providing a free platform for search and friends, what is unsaid is that the payment for them to keep offering the free platform is based on paying them with your data. They have pioneered the "AdWords model" (google) and identity targeting model (Facebook) which enables them to convert your free data to money so that they can continue financing their free platforms. With Chat GPT now coming on board as a competitor to google search, it is evident that they will have to come to an accepted VBE model to ensure that Chat GPT is accepted by the users to share their data. Else it is only a matter of time till Microsoft can support Chat GPT with funding. The reason being that Chat GPT is free, but to keep the servers going to provide a free model, Chat GPT will have to have a model that will pay for the servers that provide answers to the users search queries. Lets us also look at the actors that can make a VBE model possible for the new Oil or Data. VBE is short for Value Model business Model and Ecosystems . And every tech company dominates its field if its VBE model is strong. It has been going on for the last 150 years and every company which focussed on its VBE model and kept it in a good condition succeeded. You will understand what VBE models for technology are in this link here. https://youtu.be/2f5FXiRkAuc?si=nZw17DPW9RyM-9Qr
Chat GPT is an AI search model which will be striving to give Google search a run for their money as they claim it is more relevant to search and gives answers and the user does not have to figure out the answers that Google search gives. But there is no revenue model for Chat GPT to search, while Microsoft bundles it into its products as copilot AI, or google markets its AI as gemini AI and perhaps has an edge than Microsofts as it is linked to its search Platform. Chat GPT while today runs on money invested by Microsoft, unless it has a revenue model for its search, even Microsofts deep pockets will run out at some point in time without a revenue model to sustain Chat GPT.
Now lets us turn our attention to the "Data is the new Oil " paradigm, while this statement is true, there is no accepted VBE model today among the different stakeholders who will enable it. Take for example the Telecom operators, who invest in Infrastructure like 2G, 3G, 4G to make data access possible, but they have a very weak VBE which sells data for a price. The OTT players like Google and facebook make money hand and fists over the investments the Telecom operators make in providing 4G networks, and you saw the failure of the 5G ecosystem when Ericsson had to lay off 1200 people in its 5G area as many of the telecom operators were unwilling to scrap their 4G infrastructure and replace it with 5G Infrastructure. 5G was marketed on the concept that thre would be faster data for consumers who used communication subscriptions from telecom operators, and of better latency and higher bandwidth for the users. But most users did not care about their video coming 20 milliseconds faster over 5G than 4G with the result that many telecom operators saw no business case for scraping their ¤ G infrastructure and replacing it with 5G and the same argument will be there for 6G replacing 5G and later 7G replacing 6G in the coming 20 years.
The telecom operators are frustrated with the OTT players as they refer to saying we make the investments in Infrastructure but the OTT players make money on our investments and recently the Eu companies wrote an open letter to the EU over AI regulation. https://www.telecoms.com/ai/meta-ericsson-and-many-others-sign-open-letter-to-eu-over-ai-regulation
However they miss the point that the customers of Telecom equipment providers like Ericsson and Nokia and Huawei, sit on gold assets of customer identity, Location, connectivity and access to data connectivity, which they have put no efforts to monetising and creating value for users while the Over the Top Players like Netflix, Amazon Prime Video, Hulu, Disney+, HBO Max, Apple TV+, YouTube, Tencent Video, Rakuten, Facebook Watch and google make money by providing services around the identity of the users. The way the telecom equipment providers sell their equipments to their customers like Telecom operators is faulty, it is a statement that you invest in our 5G or 6G equipment so that the OTT players can make money on the investments you make and you will be seen as a great connectivity provider. They do not see the Telecom Operators point of View that we do not stand to gain new revenues from the investments we make scrapping our working 4G equipment and replacing it with 5G equipment from you. So thank you. The story was different for the transitions till 3G from 1G to 2G to 3G as each new G service provided an increased service to the consumers of telecom operators from Analog voice to crisper digital voice in the 1G to 2G transition and then to Video in the 2G to 3G transition and then better services in the 3G to 4G transition like Video conference calls etc, with each G transition the benefits to the consumers decreased.
But now with the new search and AI agents like Chat GPT etc, the telecom operators stand in a leading position to benefit from services around their customers identity and connectivity. AI will require a VBE model to be accepted by the ecosystem like Google search was accepted as it provided a way to surf the Internet by paying with your data. But this calls for leadership on the part of Telecom operators and their equipment suppliers and that is lacking. The other threat to these Telecom operators is the rise of companies like Starlink and Low orbit satellite companies . They will offer a global coverage which will cut out business for the telecom operators and their equipment providers. We saw the case recently of Starlink tring to get Verizons 2.4 Billion USD FAA contract. https://www.reuters.com/business/media-telecom/usdot-says-verizon-not-moving-fast-enough-24-billion-faa-contract-2025-03-11/
The model for the next AI wave will need to be thought through by the Telecom operators and their equipment providers as the data or oil on whose expense the OTT players benefit from will come under GDPR regulations and the key question of who owns data and who benefits from selling the Data Oil.
That will be the defining factor for the telecom operators and the equipment providers to them. You will see a lot of companies going bankrupt if act like sitting ducks in the telecom area. The key question for the statement that "Data is the New Oil" is Who owns the Data Oil and who benefits from the new Data Oil.