Who Wins in the Age of AI?

Note: This essay was originally released on my blog: Lifeincolor.substack.com, lightly adapted here.

The ongoing Hollywood writers and actors strike is a good case study that sheds light into how AI might impact other industries. As a foundational technology, AI will end up impacting all industries

Creating without the Creator

AI enables creating without “the creator”.

In Hollywood, the creators are the writers and actors.

Writers fear that as AI becomes more capable and creative (read: human-like), they will become increasingly irrelevant in the writing process. Technologies like ChatGPT might one day be able to augment a large part of the writing process. While ChatGPT is still in its early days, in the last few months we saw how powerful GPT4 was compared to GPT3. We could only imagine what the future GPT models bring.

Actors are worried that once AI captures their likeness and can easily replicate it, the actor will play a diminishing role in film making. An AI can create a realistic deepfake of an actor and repurpose that actor’s likeness across a variety of different mediums.

While writers and actors are rightfully worried, they might embrace AI more if there was a way to participate in the upside from AI using their original work and/or likeness.

What is needed to enable this is:

• Legal and intellectual property frameworks that works for media in the age of AI, which is global and spans across multiple jurisdictions
• Technology to track provenance of media and authenticate who created what
• Business Model innovation around income and royalty sharing agreements

Foundational Tech like AI bring forth multiple questions and highlight how not everyone is resisting the new technology.

Who Wins? Scale Begets Scale

Not everyone is shying away from AI. For example, Virgin Voyages partnered with Jennifer Lopez to use “Jen AI” to create personalized invitation messages for customers. Football star, Lionel Messi also signed a deal with Pepsi, allowing Pepsi to use a deep fake version of him to advertise for Lays potato chips.

With new technologies, there are those who resist it because they are (rightfully) concerned that the new technology will disrupt them. Then there are others who get amplified by the new technology, reinforcing their competitive advantage. This creates a divergence between those who have already “made it” and those who are up and coming.

For celebrities and people with big followings, using AI might be yet another income stream. Lionel Messi and Jennifer Lopez can license the AI version of themselves to an endless number of companies who could all produce content in parallel, allowing them to “be” at multiple places at once. But it’s unlikely that up and coming actors and writers can get the same deal.

One of the downsides of new technology adoption is that sometimes the advantages accrue to those who already have the advantage.

Scale begets scale.

Innovation Creates a New Class

Then there is the potential for a new class.

Each technology revolution has also catalyze a new class of companies, creators, builders and entrepreneurs that completely disrupt the status quo. The current Hollywood strike puts writers/actors against the studios, but with AI, studios themselves might get disrupted entirely by new entrants to their industry.

For example: Fable, an AI startup, recently unveiled its AI show runner technology powered by AI show runner agents that can “can write, produce, direct, cast, edit, voice, and animate episodes of TV.” Fable released an episode of South Park created entirely with AI. Fable envisions a future where fans can put themselves in their favorite TV shows, and the characters would use AI to “organically” interact with each other. Startups like Fable might usher in a new paradigm to film making that disrupts all the incumbents (remember Netflix with streaming versus traditional Hollywood).

Outside of startups, AI is also equipping hobbyists with the tools of creation.

For Example: Nicolas Neubert, a product designer at Volkswagen created a SciFi trailer that many thought was a real trailer for a movie. He is a hobbyist who spent over a thousand hours learning Midjourney, one of the leading AI image generators. To create the trailer, it took him a total of seven hours and a total cost of $125 (price of Midjourney and Runway subscriptions). (Read more here)

While these are early, if startups (like Fable) or hobbyists (like Nicolas) as a segment gain mainstream traction, studios might find themselves fighting a similar battle that the actors and writers are fighting now to defend their IP from AI.

So What

If we zoom out, some form of what is happening in Hollywood as it relates to AI will take place across all the other industries because AI is a foundational technology that impacts all industries.

What many industries haven’t factored into their business is the Internet’s distribution model, the rapid pace that AI is developing and the dynamics of the attention economy.

All this is to say, the only way an incumbent stays relevant is to lean into the innovation.

AI tools are only getting better and ideas circulate on the Internet way faster with lower costs of distribution.

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