How we consume data will shape the future

Despite an exponential rise in data creation and applications - the way data is sold and bought has remained virtually unchanged. Co-founded in 2021 by Wall Street data veteran Kirk McKeown, Carbon Arc is tackling the rigid and often cumbersome process of data distribution and consumption. By creating a flexible, model driven AI-powered on demand consumption-based data marketplace, Carbon Arc is not just solving a problem; it's reshaping the entire landscape of how data is bought, sold, and utilized.

The Data Distribution Dilemma

The traditional data vendor model has long been a source of frustration for both providers and consumers. As co-founder and current CEO McKeown points out, " While existing marketplaces have made strides in data discovery and some aspects of automation, they often fall short in addressing the "final mile" of delivery. This includes the complex commercials around usage, derivation, and integration – areas that have remained a "nightmare" for many in the industry”

Carbon Arc's solution to this problem is multifaceted. At its core is a highly flexible data structure that allows users to adapt the entity structure to their specific use cases and applications. By creating a very flexible data structure, the company allows customers to be as flexible as they see fit and wrap the entity structure to use case and then to application. This flexibility is crucial in a world where data needs can vary dramatically across industries and even within organizations.

Building for Growth

Perhaps surprisingly, Carbon Arc's journey didn't begin in the financial sector, despite McKeown’s background in that space. "Initially, we went into the corporate space – our first 15 consumers were completely outside of the financial sector," McKeown notes.

This diverse start proved to be a strategic advantage. "We were lucky by building into the corporate space first - this allowed us to create a sort of black mirror where corporations could use our platform to figure out what strategies to pursue, while financial entities could then use it to measure the effectiveness of said strategies.” 

This strategy has led to an impressively diverse client base. Carbon Arc now serves over three dozen customers across various sectors, including:

1. AI-native customers (LLMs)

2. Insight generators (Wall Street, Consultants, Healthcare)

3. Data-forward corporates (sports, entertainment, brands)

4. Newcomers to the data space

The company's growth is reflected in its impressive statistics: between primary and reference data sets, Carbon Arc now offers petabytes of structured data inputs and  19,000 API endpoints, with a business model combining fixed rates and consumption-based pricing.

Changing the Data Consumption Paradigm

One of the most intriguing aspects of Carbon Arc's approach is how it's changing the way data is consumed. "Data providers understand the issue of getting data to market. 70-80% of providers buy in, with the biggest sticking point being fixed costs."

On the consumer side, the reception has been mixed but promising. AI-native companies "totally get it," while insight generators appreciate the shift from capital expenditure to operational expenditure. The challenge lies more with traditional corporations, who are still grappling with understanding the practical applications of this new model, not to mention coming to terms with the sunk costs of their existing data stacks.

The AI Revolution and Data's Future

As artificial intelligence, particularly generative AI, continues to evolve, Carbon Arc sees itself at the forefront of a data revolution. McKeown draws a compelling parallel to the financial industry's transformation:

"In 1973, Black and Scholes published their paper, and that kicked off the quantification of Wall Street. In 1983, model-driven volumes were virtually zero – today, 80% of all trades are algorithmically driven. Commissions are down from 2 dollars a share to a penny a share, and you can trade microtransactions – factors, ETFs, all this innovation came from the Black–Scholes model. This change in how data is sold, consumed, and monetized is the same watershed moment today."

He predicts that the changes we've seen in Wall Street will soon be mirrored on Main Street. "GenAI is the same for data and corporate space. You're going to see what happened on Wall Street happen on Main Street. Data transactions will be ratable, fungible, and standardized – in 10 years, people will trade models and inputs, not stocks, as stock prices are just abstractions"

The company sees a world where machines buy from other machines, potentially removing humans from many aspects of the data transaction process. While this might seem far-fetched to some, the rapid advancements in AI and machine learning make it a distinct possibility.

Carbon Arc is not just riding the wave of this data revolution – it's actively shaping it. By creating a more flexible, accessible, and consumption-based model for data transactions, the company is laying the groundwork for a future where data becomes a more liquid, tradable asset, opening up new possibilities for businesses of all sizes.