AI-Driven Strategic Innovation Transforming Business Models

One good thing about AI is that it cannot innovate. At least not yet and not without humans guiding it.

AI has become the most talked-about technology in every corner of the business world.

It’s the buzzword in every email, OKR, speech. It can even go as far as doubling investors' interest when entrepreneurs add AI to their pitch decks. But while some believe the future belongs to computer scientists and data scientists, there's a broader perspective to consider.

AI has already become a commodity, embedded in almost every aspect of our lives. So I believe the future belongs to those that think of the “why” of AI, to those that recognize AI as a key resource rather than a value proposition – to innovators.

“AI by itself is not a silver bullet; it's what you do with AI that matters. It's a resource we must learn to harness effectively.”
- Andrew Ng, Co-founder of DeepLearning.ai

AI may not be innovating on its own, but it’s already empowering those who do. The potential lies not in AI itself but in how we choose to use it. Now let’s take a closer look at how AI drives change.

Think of AI as the engine of a modern ship. While the ship represents your business—steering through new markets, navigating customer needs, and charting a course for growth—the engine (AI) is what drives it forward (your key activities and key resources). It powers your journey, opening up new possibilities. But at the end of the day, it's still a ship, and people care more about the trip than the engine behind it.

With advancements in AI and the democratization of large language models (LLMs) to the public (i.e., ChatGPT, Gemini, LeChat, etc.), businesses now have unprecedented access to using AI to overhaul their engines and set entirely new courses.

Consider a machine manufacturer. By adding an AI layer to the software that controls their machines, they could help clients optimize production. Suddenly, the machine manufacturer isn’t just selling machines – they’re advising clients on how to run their production operations (possibly even becoming a “data advisor” if granted access to client data).

This isn’t just a product upgrade or evolution; this shift allows them to vertically integrate into the value chain, transforming from a machine supplier into a trusted strategic production advisor and partner.

The same concept applies to other sectors, like consumer electronics. A smartphone manufacturer, for example, could use data from the operating system to build an AI-powered assistant that helps users manage their day-to-day activities. In this case, the value proposition transitions from a hardware-centric model to a pocket personal assistant, creating entirely new revenue streams. Imagine having a personal assistant that makes decisions for you—booking rides, making reservations—all based on your habits.

These changes are already taking place, and I've witnessed them in action through my work with category leaders across a variety of industries.

If you take a step back and look at the data your business is already collecting, you’ll find opportunities for transformation and innovation. Sometimes it just takes a bold idea to see the potential.

Whenever an accident happens in Formula 1, a safety car comes out. This forces all drivers to slow down, causing them to lose any advantage they had over the car ahead or behind, effectively bunching the field together.

Now, think of AI as your safety car. If you’re lagging behind, AI won’t put you in first place, but it gives you an opportunity to get back in the race, closing the gaps with the leaders and grabbing a better position. If you’re leading, your position has never been so vulnerable.

I believe that in the next 10 years we will see more changes in the Fortune 500 ranking than we’ve ever seen before. And AI will be a big factor - if not the main one. It's no longer just about staying ahead; it's about staying in the race at all.

Innovate or wait for the next safety car.

By viewing AI as a resource rather than a solution in itself, we take the pressure off of needing to reinvent everything from scratch. AI creates space for us to focus on what matters: steering our businesses toward meaningful transformation, while AI does the heavy lifting in the background. It shifts the mindset from the fear of being outpaced to the relief of knowing we can use it to improve what we already do well.

The future is as promising as your next step. And AI offers a unique opportunity to rethink how you create value.

If you’re looking to explore how AI can drive innovation in your business, I’d be happy to discuss it. Reach out to me at vuk.vegezzi@visium.ch for a conversation.