
In "Competing in the Age of AI," Harvard experts reveal how AI reshapes business fundamentals. Endorsed by Microsoft CEO Satya Nadella and named Forbes' "Top Tech Book of 2020," it's the playbook P&G executives study to navigate our AI-driven future. What's your company's AI strategy?
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Imagine walking into Christie's auction house in 2018 as a painting created entirely by artificial intelligence sells for $432,500. This wasn't just a curiosity - it was a harbinger of a fundamental shift in how value is created. AI isn't simply automating routine tasks; it's transforming the very architecture of business. Harvard professors Marco Iansiti and Karim Lakhani reveal that we're witnessing nothing less than a complete reimagining of the firm itself, where algorithms and data replace traditional processes as the operational core. The most profound difference between traditional and AI-powered companies isn't just technology - it's scale economics. While conventional businesses face diminishing returns as they grow (struggling with coordination challenges and management complexity), AI-driven firms achieve the opposite: increasing returns to scale. Every new customer interaction generates more data, which improves algorithms, creating a virtuous cycle of better service and accelerated growth. This is why companies like Amazon can serve hundreds of millions of customers with remarkable efficiency while traditional retailers struggle to expand beyond regional boundaries. What makes this revolution different from previous technological shifts? It's not just faster - it's fundamentally different. Traditional companies use technology to support human-driven processes. AI-powered firms flip this model, placing software and algorithms at their operational core, with humans designing and overseeing these systems rather than executing the work themselves.