#12: AI Is The Next Big Ecosystem
But first it'll disrupt existing ecosystems
Touched upon in Tuesday’s edition, Technology is Profound, AI has changed the way humans interact with technology. Large language models (LLMs) have created the ability to input detailed, rigorous questions (via a chatbot) and receive one concise answer in return. I’m oversimplifying it; however, LLMs are a big upgrade from the usual search engine experience, where you type in a question and receive ten links – some of which are advertisements.
The impact LLMs are having on search engines is only one example of how LLMs will change entire industries. The impact on the overall economy will be much larger.
Incomprehensively larger.
I believe the leading LLMs (GPT, Gemini, Claude, Llama, etc.) are the center of a new ecosystem from which millions of jobs and sub-industries will spawn. Let me explain.
In 2024, ~$750B of gross merchandise value went through Amazon.com (note: not Amazon’s total revenue, but the overall value of the product sold on their website). Using 2023’s ratio of sales stemming from marketplace, ~$500B came from third-party marketplace sellers, of which there are 1.1 million sellers.
$500B in sales from 1.1 million sellers. Think about all the jobs created on the brand side to support those 1.1 million sellers (rough math, but approximately one seller equals one brand). Each brand needs people to design the product, manufacture the product, ship the product, and market the product. And that’s only the brand side.
There are countless Amazon software businesses that have spun up to help optimize e-commerce listings, produce more effective creative assets, and manage inventory. Also, Amazon advertising agencies are a dime a dozen. Both sub-industries have tens of thousands, if not hundreds of thousands of people employed. And this isn’t an exhaustive breakdown of every Amazon marketplace sub-industry that is alive and well!
Amazon Marketplace is an ecosystem on which other industries are built off. The same goes for Airbnb and homeowners, Apple and the App Store, and Uber and car owners!
LLMs will be the basis for a new ecosystem. It’s fascinating that each LLM is “getting big” at roughly the same time, which will lead to fierce competition, as well as rapid technological innovation.
The budding AI ecosystem’s first act has been disrupting current industries with a more automated and scalable approach to doing business. And what is specifically doing the disrupting? AI agents. These software programs trained on both data provided by an LLM and user-specific information can “think” like a human and execute human-like tasks without constant manual intervention. Anyone curious and driven person can create an AI agent thanks to the tools that exist in the ether today. Let’s check out a few industries that are being turned on their heads today.
Customer Service. Why employ a team of people when you can have an AI chatbot that replicates your company’s voice, style, and tone for a fraction of the cost? With Cavalry AI, you add in your brand’s style and tone and then you’re ready to launch.
Who needs to pivot their career? Call center employees.
Software Engineering. Don’t know how to code? No problem. Cursor AI allows you to write new code through prompt engineering, as well as edit your existing codebase.
Who needs to pivot their career? Low-level software engineers. This one is a little tough as you can’t become a senior software engineer without first being a junior software engineer. However, you must keep in mind that AI tools will allow you to move quicker and produce more work. If you can’t keep up with production expectations, you may be left behind.
Content Creation. Now this one is still in development (but peek the Open AI announcement that came out on March, 25th), but it’s come a long way over the past six months. If you need to create a picture, head to Midjourney. Through a well-crafted prompt, you’ll have your socks blown off by what technology can produce.
Who needs to pivot their career? Photographers, videographers, and graphic designers who don’t embrace AI. These jobs are still very important for content creation, but like software engineers, expectations for production will probably increase.
I want to emphasize that these are only a few examples of AI upending existing industries. Countless jobs will be created (and lost) throughout the AI sub-industry boom, and some sub-industries that come up may be quickly brought down if the LLMs change various elements of their models. I plan to stay close to developments in AI sub-industries, but even closer to new products and features created by LLMs themselves. This way, I’ll be ready to catch the wave before it breaks.