Colleague, in this issue we cover what folks are missing about the DeepSeek revelation, how I know firms are charging too much for basic AI work, and where the "agentic AI" paradigm is going off the rails.
Managing our businesses, and ourselves, through today's rapid technological innovation, economic uncertainty, and cultural change.
After a brief hiatus owing to our family's new addition (welcome, baby Carter!), we cover what folks are missing about the DeepSeek revelation, how I know big firms are charging too much for basic AI work, and where the "agentic AI" paradigm goes off the rails. This month's C-Suite Intelligence™ comes in three sections:
Unless you’ve been living under a rock, you’ve likely heard about DeepSeek, the tiny Chinese startup whose AI model, R1, blindsided the tech industry by matching industry giants like ChatGPT—at a fraction of the cost.
The dominant story focuses on the geopolitical balance between the United States and China, and it's an important aspect. But that story obscures what I see as a fundamental flaw in our industrial strategy: Turns out the "bigger, faster, pricier" formula might not just be wasteful; it’s becoming outdated.
The innovations DeepSeek made were already obvious within the public literature. How did our best (and highest paid) engineers miss them? After all, a little startup — which was late to the game — was able to release a multi-billion-dollar product for less money than these big tech firms spend on just one or two senior engineers.
The takeaway? Brute-force spending won’t guarantee dominance in AI. It’s agility and smart innovation that truly pay dividends.
Time to rethink your assumptions before another small player upends your industry.
Tech Truth Serum - Ignorance is Expensive
One of my clients shared an estimate from a big-four consultancy. It was to build an AI agent that would summarize documents related to employee queries from their SharePoint file server, to speed up back-office processes.
These are what I call “better enterprise search” applications, and they've grown in popularity for good reason: they’re massively cost efficient, and they can provide customer interactions far richer than those we get from the kafkaesque chatbots of yore.
The project was to serve as a proof-of-concept, so it wouldn't actually fully work. Deploying it to production was going to cost more. The price? $1 million.
At the university, we teach students how to build applications like this efficiently, from scratch inless than a day...including tuning, training, etc.
So I politely asked, why didn’t he just hire one of my students? Double the consultant’s rate, cut the investment in half, and give the rest to me. He’d get there faster, make me happy, and still be within his discretionary budget.
When AI gets expensive, it’s because you’re paying the price of being underinformed.
Sure, it can require investment in a vendor, or your own people, to develop the right skillsets, curate the right “raw materials” (data), and train the right models (cloud and compute) for the right applications.
But in my experience, leaders develop the wrong skillsets, overly consolidate their raw materials, and incur big cloud bills training models that end up “missing” the fundamental need.
You’ll know you’re doing AI the right way when it costs you six figures or less, but you’re getting back nine.
The price of entry is less than most people think.
AI Fairy Tales - Diffusing Responsibility
This month's fairy tale taps into the present zeitgeist of "AI agents," the spirit of which is that chatbots are quickly approaching super-intelligence and will replace knowledge workers imminently, for monthly software subscription of just $20k/mo.
A popular startup named Lattice.ai announced a feature for the profiteering corporate overlord in all of us: Employees using their org chart software would now be able to directly manage “AI agents” as if they were human resources. Users could set OKRs for the AI agents, evaluate their performance, and offer them feedback.
May I assume, given the oddly human treatment of these agents, that the company software would also award bonuses to the AI agents that hit their goals? 😂
The release was rightfully pilloried by the press, until they rolled back the feature.
Don't anthropomorphize AI technologies. These are software tools, each built by someone to achieve a specific purpose. The more we treat AI as "human," the more we obfuscate and diffuse accountability around the choices we make in how we develop and use them—including the goals they optimize for.
If you want the best performance out of your people, don't formalize a way for them to point the finger at a nameless computer.
Mailbag Questions?
If you have a question you'd like me to answer in this newsletter, or live on LinkedIn, please email me at joe@jlsutherland.com.
Upcoming Programs
ANALYTICS THE RIGHT WAY, my new book with Tim Wilson, was released last month. It's already a worldwide bestseller in data and business communication!
I've had a some folks ask to do a workshop based on the book. If you, or whoever leads your data/analytics organization, is interested in a Zoom workshop, or even coming to the exceptional Atlanta area (I'm thinking Buckhead) for two days of learning, experimenting, and building new collegial relationships, reach out now.
"Analytics the Right Way changed my way of thinking as a CEO and life in general." — Heather Greene, CEO, Milam + Greene Distillery
Last year I was able to talk to thousands of people about how AI works, and how it’s accelerating innovation in businesses, increasing social mobility, improving education, and adapting to cultural trends. You can watch the sizzle reel here for one of the general public talks we did.
Looking for a qualified speaker who can address both business and public audiences on this popular topic? Please reach out.
If you have a speaker cancellation and need someone last minute to fill in, I can be available on short notice to take their place.
Three options for groups and individuals to receive “real time” coaching to build their businesses and careers on a continuing basis. 6 months of unlimited access to me, and we calibrate the level of detail and follow-up you need by mutual agreement.
Develop a high-margin business by lowering costs, identifying monetization opportunities that boost free cash flow, and raising your org’s profile in the company or marketplace. Apply the same methodologies I used as an executive at the big tech companies like Cisco, Amazon, and my startups. Why wait?
The approach includes formal workshops, applications to existing projects and programs, ongoing coaching for implementing staff, and possible strategic reorientation:
Enable rapid, effective decisions that cut through uncertainty in the new AI-empowered economy
Reinterpret strategic advantages and reveal blind spots that your vendors and consultants won't flag
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Invigorate and inspire a spirit of innovation in your leaders, by transferring "tech giant" insights to them
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Build the skills and processes you need to insure your business and operating models against competition
