Note — Sep 18, 2022

The AI Unbundling

I haven’t linked to a Ben Thompson article in a little while, I’m kind of done with the deep dives into big-tech business models, but in this one he’s looking at a current interest of mine, AI models like DALL-E and Midjourney. He starts by describing and detailing his concept of the idea propagation value chain, and the disruption of each level (creation, substantiation, duplication, distribution, and consumption). He argues that, starting at the end of the line, in time each bottleneck was removed, and that these AI tools will do the same for substantiation, leaving only (barely) creation. It’s a good framework to think about this and mayyybe he’s right that “differentiated creators” will “leverage text-based iteration to make themselves more productive and original than ever before,” but will they be able to stay differentiated when copying is so easy? And, as I’ve said before, do most (enough) people care about the difference?

What remains is one final bundle: the creation and substantiation of an idea. To use myself as an example, I have plenty of ideas, and thanks to the Internet, the ability to distribute them around the globe; however, I still need to write them down, just as an artist needs to create an image, or a musician needs to write a song. What is becoming increasingly clear, though, is that this too is a bottleneck that is on the verge of being removed.d […]

[H]ighly differentiated creators, though, who can sustainably deliver both creation and substantiation on their own will be even more valuable. […]

AI-generated images will, per the image above, soon be a flood, just as publishing on the Internet quickly overwhelmed the old newspaper business model.