In the past seven years, I have immersed myself in the burgeoning world of artificial intelligence as a product manager and now as an entrepreneur, successfully launching two AI-native applications within a year. This journey has granted me unique insights into the current AI wave, prompting me to pen down my observations based on personal experiences and reflections.

The defining characteristic of the recent AI movement is its unparalleled ability to provide highly personalized services at scale. The introduction of ChatGPT in the last two years has sparked yet another surge of interest in AI applications. While discussions surrounding these applications flourish, the elusive “Killer App” that revolutionizes use remains absent. Nevertheless, I staunchly believe that we are witnessing a technological revolution akin to the Industrial Revolution, set to redefine the dynamics of supply and demand while opening new realms of possibility. At its core, this transformation is a reformation of intellectual resource accessibility.

Historically, intellectual resources have been confined to human expertise, marked by their scarcity and high cost, especially in fields such as education, psychological counseling, and legal services. These sectors heavily rely on human intellect, which is inherently limited, making such services deemed luxurious and often unaffordable for the average individual.

However, the advent of large language models (LLMs) has dismantled these barriers. To elucidate the connection between the AI movement and the Industrial Revolution, let’s draw parallels from history. The Industrial Revolution democratized numerous commodities, once exclusive to the affluent.

Take, for instance, textiles. Prior to this period, textile production was labor-intensive and costly due to its reliance on manual craftsmanship. Cotton, for instance, was such a luxury that it was dubbed “white gold.” Fast forward to the Industrial Revolution, where mechanization revolutionized production, significantly lowering costs and making cotton accessible to all.

Another example lies in glass products. Before industrial advancements, the laborious process of hand-blowing glass resulted in it being a coveted luxury due to its time-consuming nature. With advancements in manufacturing processes, glass windows and mirrors transformed into commonplace items.

Books further illustrate this point. Initially, book duplication was sluggish and pricey, limiting access to the wealthy. The invention of the steam printing press heralded a new era in literature, allowing for mass production and making books available to broader audiences.

Even objects as ordinary as clocks were once seen as status symbols. Only the elite, often nobles or affluent merchants, were able to afford them, leaving the common populace without means to keep track of time accurately, leading to peculiar professions such as bell-ringers. In essence, the Industrial Revolution made items like cotton textiles, glass, literature, and personal timepieces widely available.

Drawing a parallel, the AI boom aims to eradicate the scarcity of intellectual services. Services that traditionally required human intellect will soon be democratized, enabling ordinary people to access them. The transformation promises that highly personalized services can be broadened and distributed widely.

But what exactly defines highly personalized services? They are characterized by their reliance on specialized knowledge and an individual's unique circumstances, typically delivered by humans. For instance, my own entrepreneurial venture commenced with the integration of AI in the practice of astrology—a field steeped in individual advice historically delivered by experts.

As I ventured into AI-enhanced astrology, I discovered that the demand for such personalized services has existed unchanged through ages. Despite its historical significance, quality resources in astrology remain limited. Traditionally, astrological insights were imparted via word of mouth and symbolic expressions, leading to a gap where meaningful engagement was often superficial.

In early 2023, while utilizing GPT-3.5, we launched "Lunar Tarot," an AI-driven app that doubled as a platform for astrological readings. It was a relatively low-cost initiative, thriving on organic growth and achieving break-even swiftly. This experience reinforced my belief that AI is indeed a transformative force, echoing the Industrial Revolution’s promise of scaling personalization.

Despite the promise of AI, many applications face substantial challenges in their implementation. High customer acquisition costs remain a major hurdle, as the necessary channels for reaching users remain limited and expensive. Additionally, the emergence of large models has brought new financial strains, heightening operational costs. The intricacies involved in making AI technology applicable to real-world scenarios cannot be understated; many contexts require complex engineering to meet acceptable delivery standards, and even then, hurdles persist.

Yu Jun, an expert in the field, formulated a product value equation: Product Value = (New Experience - Old Experience) - Migration Cost. With inflated costs stemming from new implementations, this equation evolves. The landscape shifts to: Product Value = [(New Experience - New Cost) - (Old Experience - Old Cost)] - Migration Cost. Addressing customer acquisition costs becomes essential, further complicating the equation for achieving product-market fit, which can be articulated as:

Commercial Value = [(New Experience - New Cost) - (Old Experience - Old Cost)] - Migration Cost - Customer Acquisition Cost.

The crux of this equation lies in the balance between new experience versus new costs. Without significant improvement over existing experiences, many initiatives may struggle to find grounding in the marketplace. Meeting customer demands effectively necessitates time, and given the rapid reduction in operating costs for large models, the possibility for success in various contexts remains bright.

Over my challenging year and more in entrepreneurial pursuits, I have faced myriad difficulties; yet my optimism remains unshakeable. The operational costs of large models are plummeting—witnessing a 75% decrease in just a year is becoming commonplace. Each drop in cost expands possibilities for diverse applications.

Furthermore, advancements in technology and the wisdom of practitioners enhance our ability to craft superior experiences. Much like the Industrial Revolution made clothing, footwear, and literature accessible, the AI era promises to usher in a time when personalized services—private tutors, mental health counselors, and more—become integral to everyday life.

In conclusion, while the entrepreneurial journey can be arduous, it is also imbued with exhilaration and privilege. Encountering this transformative wave and contributing to the exploration or creation of meaningful and valuable innovations is inherently rewarding and enriching.