DaaS leaders and their thoughts on AI

Auren Hoffman recently prompted the World of DaaS community to see how data execs are thinking about AI and its impacts on the data community.

Will AI help or hurt existing data companies?
on the one hand, AI is drastically reducing costs for crawls — it is MUCH easier to crawl data today than it was just 6 months ago. so you might be thinking: great — wdata companies will be MUCH more profitable.

but on the other… pic.twitter.com/ABADiU9d9y

— Auren Hoffman (@auren) October 28, 2024

Between viewpoints expressed on twitter and the #daas-execs community slack channel, cautious optimism seems to prevail.

Optimistic Outlook: AI as a Catalyst for Growth

Proponents of this view emphasize the positive impact of AI on data companies:

• Cost Reduction and Expanded User Base: As one respondent noted, "Data will increasingly become essential for a growing number of people and processes. While the cost of content is likely to drop significantly, the user base will expand exponentially as data becomes more accessible and indispensable."

• Enhanced Data Processing: Another participant highlighted, "I think the possibilities just became so much more. Things like tagging, summarizing, inferring, etc."

• Unstructured Data Potential: "Also important to note, unstructured data will become easier to work with, more valuable. Stupid metaphors - if data is the new oil, then unstructured data is the new shale," observed one commenter, pointing to new market opportunities.

Cautionary Stance: Disruption and Increased Competition

Critics and cautious observers highlight potential challenges:

• Lowered Entry Barriers and Price Compression: Hoffman himself pointed out, "AI makes it so MUCH easier to collect data and attack legacy players. there will be much more competition and more price compression."

• Obsolescence of Proprietary Systems: A member warned, "I think in general, the new AI revolution will pose a challenge for incumbents like us because it levels out the playing field for new competitors to enter... The same goes with the internal payment service vs. something like Stripe. Most new startups should not build their own payment systems now."

Balanced View: A Transformative Force with Mixed Implications

A more nuanced perspective acknowledges both opportunities and challenges:

• Market Transformation: The overall sentiment suggests that AI will reshape the data industry landscape, creating both winners and losers.

• Buyer's Market: Hoffman concluded, "But it will definitely be good for buyers of data: data will get better and prices will be cheaper."

• Necessity for Innovation: "In sum, I think new AI tools will render some of the incumbent's existing 'moats' (if there is such a thing) obsolete," implying the need for existing companies to innovate.

• Shift in Value Proposition: The focus may shift from data collection to data analysis and insights, as suggested by comments on the expanding possibilities in data processing.

As Hoffman aptly put it, it "will be both — and it will be incredibly uncertain." Success in this new landscape will likely depend on a company's ability to navigate these changes, leverage AI technologies, and adapt their business models accordingly.