The Business of AI Startups

34 Pages Posted: 3 Dec 2018

See all articles by James E. Bessen

James E. Bessen

Technology & Policy Research Initiative, BU School of Law

Stephen Michael Impink

New York University (NYU) - Leonard N. Stern School of Business

Robert Seamans

New York University (NYU) - Leonard N. Stern School of Business

Lydia Reichensperger

Boston University - School of Law

Date Written: November 29, 2018

Abstract

New machine learning techniques have led to an acceleration of "artificial intelligence" (AI). Numerous papers have projected substantial job losses based on assessments of technical feasibility. But what is the actual impact? This paper reports on a survey of commercial AI startups, documenting rich detail about their businesses and their impacts on their customers. These firms report benefits of AI that are more often about enhancing human capabilities than replacing them. Their applications more often increase professional, managerial, and marketing jobs and decrease manual, clerical, and frontline service jobs. These startups sell to firms of different sizes, in different industries and nations, but the distribution of activity is distinct from that of larger firms. Firms serving EU customers appear to use higher levels of data protection.

Keywords: artificial intelligence, automation, technology, labor-saving technological change, entry barriers, data protection

JEL Classification: O33, J21, L10

Suggested Citation

Bessen, James E. and Impink, Stephen and Seamans, Robert and Reichensperger, Lydia, The Business of AI Startups (November 29, 2018). Boston Univ. School of Law, Law and Economics Research Paper No. 18-28. Available at SSRN: https://ssrn.com/abstract=3293275 or http://dx.doi.org/10.2139/ssrn.3293275

James E. Bessen (Contact Author)

Technology & Policy Research Initiative, BU School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States

Stephen Impink

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Robert Seamans

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Lydia Reichensperger

Boston University - School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States

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