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Protecting Innovations Built on Generative AI

Generative AI is having its moment. From OpenAI to Stable Diffusion, foundational technologies for generating content -- code, text, or images -- from minimal user input are becoming ubiquitous. To the extent the modern knowledge economy can be characterized by processes for creating the right information and providing that information to consumers at the right time, generative AI solutions have the potential to significantly reduce the cost and time needed for these processes.

This article does an excellent job laying out the current landscape as well as providing guidance for how both new players and incumbents can create businesses around AI innovations and protect those innovations. In many ways, the playbook for emerging companies to succeed stays the same even as the technologies change -- focusing on any unique first-mover advantages they have in their vertical and building from there.

The application layer is where new companies will emerge by leveraging an off-the-shelf model. There’s incredible innovation and company creation occurring in the application layer already. The caveat here, of course, is anyone can access the same API’s from the model layer! Companies that want to build a monopoly or competitive product, they’ll win by being vertically focused, having a superior product, exploiting first-mover advantage, and integrating deeply with API’s already used in their niche.