You as a commodity and GenAI as your reliable partner to get there.

In recent time we hear a lot of buzz about how genAI is a commodity like say electricity and how it will revolutionize the way we live. Sounds incredible, especially if we consider the whole genAI value chain holistically and take a closer look at costs, potential legal and regulatory risks, data sourcing issues and of course actual performance of the SOTA models. That is, however, not the topic of this quick note. Here we just want to outline, that using a genAI as the major value added activity in your job makes you and your work a commodity! To avoid this situation you should first become aware of it and understand why it is so and why it is a problem.

Lets recap first what a commodity is and why you might care, that you and your work become one. A commodity is a good or resource, whose individual instances are considered interchangeable by the market. Furthermore, a commodity is widely available on the market. As example consider electricity. It does not matter who sells it to you or where it has been generated and therefore it is interchangeable. There is also sufficient number of producers. This has an implication, that in a commodity market the competition is dominated by price. This usually leads to low margins. So if your work is a commodity, then your profit will perish. This is also possible even if today your business or job throw strong margins. The genAI may create new conditions, which will disrupt your basis of competition.

To avoid the commodity situation you should first become aware of it and understand why it is a problem.

You may ask, why would my work considered a commodity if I use genAI to accomplish it? Well, the answer is the way the genAI works and being delivered to you. It is basically a sampler from a complex probability distribution over token sequences, which has been obtained in an elaborate way from tons of scraped data. Naturally, such a sampler will provide average answers which bear little potential for differentiation. With other words the stuff you get out of genAI is the stuff your neighbor will also potentially and easily get. There is no consistent way to differentiate on genAI content and your work, which relies on genAI, will be an average at best. Next issue is the access to genAI. It is accessible to everyone who are willing to pay for it and the prices are really low. There are even completely free offers. So entry barrier is practically non-existent and that means there will be a lot of people like you providing the same average work. This is the commodity situation we described earlier. The abundance of average work will destroy the margins of those who provide it. And don't be too optimistic about sinking costs of genAI, there are reasons to believe, that they shall actually increase.

So now, what to do? Should you stop using genAI? Well it is up to you, but here is the advise: Do not rely solely on genAI, you have to be wise in how you use it (I know, it is not quite clear now what it exactly means, considering all the challenges). Be strategic about what you do, understamd your basis of competition, differentiate your work, try at all costs to avoid getting into commodity market with fierce competition. For now I think the best way to do it in the context of our discussion here, is not to make genAI the core part of your work.