The Reach and Limits of AI Thinking
In this article, Nora Ghaoui explores the ability of AI to write a strategy.
Three years ago, I asked if large companies all had the same strategy. Perhaps their strategies all sounded the same because managers picked up the same ideas from MBAs and consultants, or because they hired the same copywriters. Last month, a new source of non-differentiating strategy appeared – strategy written by AI.
The AI in question is GPT-3 from OpenAI, which has been getting a lot of attention lately. Here’s a quick introduction to GPT-3: it is a language prediction model that autocompletes text from the input that you give it, like you see when you use Google search. It’s able to complete many different kinds of text, giving it a wider range of application than other models.
Its power comes from its sheer size. It has been trained on a huge amount of text from the internet, and it has 175 billion parameters in which it stores the patterns in that text. Its response to an input is the text that is statistically most likely to come after it. So the more examples it has, the better it can match the input.
Strategy written by AI
Last month, by way of a test, a VC investor asked GPT-3 to write the second half of his investment memo. It produced several paragraphs of text under the heading of “strategy”. What’s interesting about this text is that is sounds very plausible but isn’t quite right.
Here is some of the input that GPT-3 received:
Sword Health is a full stack digital physical therapy provider. They are the first group in the world to create remote autonomous digitally guided therapy […]
An important aspect of their go to market strategy is to offer the solution to payers as an acute care and preventative solution, which the cost structure of current in-person PT centers cannot support. They then use this as a wedge to expand into displacing PT centers.
And here is the beginning of the AI-generated strategy:
First, we would acquire or acquirer an ambulatory primary care center that has PT, sports medicine, and physical therapy expertise. Then build a Sword center within that facility, allowing Sword to scale without having to scale its own brick and mortar centers.
The first thing to note is that, apart from the grammatical errors, this is a coherent paragraph that covers relevant topics and presents an argument in a logical fashion. It’s impressive. The content also sounds right at a first glance.
Key points include:
Prediction errors from AI models
AI and original thinking
Read the full article, Can AI write a strategy?, on Linkedin.