Artificial Intelligence (AI) has become one of the most talked-about topics in business. The headlines are filled with both promises of transformation and warnings of disruption, leaving many wondering whether AI is a friend, a foe, or simply another overhyped fiction. To make sense of it all, it’s important to look past the buzzwords and examine what AI really means, focusing on real opportunities, genuine risks, and the practical realities of using these tools.
At times, marketing hype around AI has seemed to reach fever pitch. Companies promise that AI will revolutionise everything from customer service to content creation, with news outlets warning of massive job losses through people being replaced with computers.
In truth, you’ve probably been using basic forms of AI for years without knowing it. Spellcheck in your email or word processor is a simple AI that quietly corrects your typos, just as a spreadsheet formula that automatically calculates totals or flags errors is an algorithmic intelligence at work. These tools use rules and logic to process information and create an output, just on a much smaller scale than advanced AI models.
The marketing-fuelled buzz of some AI tools is driven by commercial interests aiming to attract investment and customers, often overstating the capabilities of the technology.
This has driven the term AAI, or Artificial Approximate Intelligence, to describe the current state of AI technology. Unlike true intelligence or consciousness, AI systems, including large language models, do not genuinely understand the world, like a human can. Instead, they identify patterns in vast datasets and then make probability-based predictions of what should come next. The outputs that are generated can estimate the most likely outcome, not by reasoning or comprehending meaning in a human sense. This means that AI (AAI) simulates (or approximates) intelligence rather than truly possessing it, effective in many scenarios, but prone to failure in novel or ambiguous contexts. Referring to AAI helps set realistic expectations, avoiding the misconceptions that can lead people to overestimate the capabilities of these tools.
Once we accept that AI can be limited in complex problem solving or creativity, we can still embrace the enhanced productivity it can bring to everyday tasks.
But before implementing AI in your business, carefully consider what you are trying to achieve and whether the tool you’re considering is truly intelligent or an automation (both are fine – just be clear). It’s also wise to check what support is available and to pilot any new tool on a small scale before fully committing.
Coming back to the AI industry, some prefer to differentiate from the run of the mill AI tools that are just a series of pattern predictors by describing groundbreaking technological advanced systems as ‘real’ AI or Advanced AI (another AAI). These systems adapt, learn, and perform more complex, context-aware tasks. For SMEs it’s crucial to understand this distinction. Not every tool that claims to be AI will deliver the value or advanced intelligence you expect, and it’s easy to overpay for technology that doesn’t actually meet your needs.
Security is one of the most significant concerns when it comes to adopting AI of any type. On one hand, AI can help protect your business by powering spam filters, fraud detection, and other security tools. On the other, it can introduce new vulnerabilities. For instance, where AI applications require access to your business data, business owners must ask questions about where that data goes, how it’s stored, and who can access it. Be vigilant, scrutinise every tool’s privacy policy and security credentials, and never assume that ‘AI-powered’ is synonymous with ‘safe’.
Another consideration which can have a significant impact on your business is that of bias. AI models are trained on data, and if that data contains biases, the AI will inherit and amplify that predisposition. This can be a subtle but serious problem. For instance, an AI-powered hiring tool might favour certain backgrounds or demographics, or a chatbot might misunderstand sector or regional idiosyncrasies and alienate potential customers. For entrepreneurs, biased AI could undermine your brand, damage customer relationships, or even expose you to legal risks. It’s important to ask vendors how their models are trained and tested for fairness, and to keep a close eye on AI outputs for unexpected or unfair patterns.
Reliability is another area where AI can fall short, particularly because of the phenomenon known as the stochastic parrot. Large language models, like the ones used in chatbots, are trained to generate plausible-sounding text by predicting what words should come in which order based on vast amounts of data. However, they don’t truly understand the information they generate. This can result in ‘hallucination’ where the AI produces content or references that sound plausible but is factually incorrect or even entirely fabricated. Researchers coined the term stochastic parrot to describe how these models mimic and remix existing data without genuine comprehension.
For founders this means that if you rely on AI for research, content creation, or customer communication, you must always verify the information before using or publishing it, making sure you negate the risk of spreading misinformation or making decisions based on unreliable data.
There has been much talk of the high computational requirements of datacentres where AI is processed needs to be balanced with environmental sustainability. For example, according to Business Energy UK, ChatGPT consumes the equivalent of 978,000 baths full of water (for cooling) and enough electricity to fully charge 800 million mobile phones EACH DAY. Some businesses try to balance their use of these tools to align with their sustainability goals.
Despite all these potential pitfalls, AI offers real opportunities for small businesses. Using just basic tools to automate routine tasks like scheduling, invoicing, or handling basic customer queries can free up your time for selling or more strategic work. AI-powered analytics can help you spot trends in your sales or website traffic that you might otherwise miss, while creative tools can help you draft emails, generate marketing copy, or design graphics.
Until you’ve experimented, you may not really appreciate just how quickly an AI tool can compare data sets, create meeting notes and actions, or fetch information from a whole range of sources and precis the salient points.
This productivity improvement can give you a competitive edge, allowing you to punch above your weight compared to larger businesses. The key is to start small, experiment with tools that address specific pain points, and focus on tangible improvements rather than chasing the latest trends. Sometimes the hardest thing to get right is the text you enter into the AI tool to generate a specific output – you will be amazed how much direction you need to give these platforms. However, it’s easy to learn how specific you need to be, and how adding links to websites or existing examples can result in high quality outputs.
Depending on how it is used, the path to successful AI adoption may not be without hurdles. Besides the risks of security breaches and biased outputs, you may face challenges with integrating AI tools into your existing systems, justifying the costs, and as a business owner the challenge to find the time to go up the learning curve that comes with new technology. The marketing hype can make AI seem like a magic bullet, but these tools require thoughtful setup and ongoing oversight. It’s also important to remember that, as the business owner, you are ultimately responsible for the outcomes of any AI system you use.
So, coming back to the original question about friend, foe or fiction: Overall, AI is neither a universal friend, an inevitable foe or an over-hyped fiction. It is a set of tools; some basic, like spellcheck and spreadsheet formulas, and some more advanced, like chatbots and predictive analytics. The real trick is to approach AI with both curiosity and caution: embrace the opportunities, but don’t ignore the risks.
As a small business you have the agility to experiment, learn, and adapt quickly. Just remember that behind every ‘intelligent’ tool is a human who is still the most important decision-maker in your business. Treat AI as a helpful assistant, not a replacement for your judgement, and you’ll be well positioned to thrive in the age of intelligent technology.
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