The Gravity of Data: How Information Anchors Modern Decisions
Editor’s note: In a recent post on Software is Feeding the World (SFTW), agrifoodtech consultant Rhishi Pethe examines the concept of “data gravity” and emphasizes that AI models must adapt to enterprise datasets rather than the other way around, intensifying competition and pressuring standalone model providers in a deflationary market. Here’s a summary of that article:
The evolution of pricing strategies for enterprise software and AI-based products highlights their role in improving productivity and transforming job roles. While traditional enterprise software pricing relies on per-user models to reflect efficiency gains, AI solutions are opening doors to innovative approaches. For large language models (LLMs), companies are experimenting with productivity-based, usage-based, and value-based pricing, the latter fostering trust by sharing risks and rewards.
Emerging models include pricing AI tools based on the work performed, such as LLM agents acting as junior staff, and factoring in savings from reduced training and turnover. Outcome-based pricing, tied to measurable results like customer service case resolutions, is also gaining momentum.
These approaches aim to capture the full value of AI tools, encompassing productivity boosts, cost efficiencies, and improved service quality. Advancements like coding co-pilots have made building LLM-based AI agents more efficient, reducing engineering costs and enabling smaller teams to accomplish more.
MORE BY RHISHI PETHE
Syngenta’s Chief Digital Officer Weighs in on Leveraging AI for Digital Transformation in Legacy Companies
However, this efficiency challenges value-based pricing as enterprises push for these savings to be passed on. With enterprises often controlling proprietary data, competition among AI developers could lead to commoditization and lower switching costs for LLM agents. Additionally, the concept of “data gravity” emphasizes that AI models must adapt to enterprise datasets rather than the other way around, intensifying competition and pressuring standalone model providers in a deflationary market.
For more in-depth coverage, visit SFTW (Software Feeding the World).
Subscribe Today For
