According to many experts, artificial intelligence will be a boom for productivity and efficiency—but only if quality data is provided. Tech giants including Meta (META) and Google (GOOG, GOOGL) are taking the lead and could very easily swallow the smaller stakeholders in the sector, specifically in the monetization of data.
Nomad Data CEO Brad Schneider discusses how AI will turn data into dollars. Schneider notes that social and online media sites will instrument the first wave of data monetization, which involves training large language models, while the second wave focuses on more specific, “narrower” models that serve single functions.
Large tech companies are "the most data-hungry ones today,” Schneider explains, saying they are "building the tools" of the so-called AI revolution. Schneider goes on to say smaller companies will be able to innovate AI faster.
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Editor's note: This article was written by Eyek Ntekim
Video Transcript
- Well, of course, AI is only as good as the quality of the data that it's trained on, which means tech giants, like Meta and Google, with a sizable edge can crush smaller players. Now our next guest says billions of dollars of data was bought and sold over the last 12 months, and expects it to double this year. But how does AI turn our data into dollars in the marketplace?
Well, to tell us more, Brad Schneider, nomad data CEO is here. Thank you for joining us this morning. So as Akiko was mentioning, when people think of AI and data, it seems this amorphous blob here. So what do we need to know about the sort of data that these large language models are trained on, and how it actually turns into dollars for some of these companies that want to use it?
BRAD SCHNEIDER: Sure. I mean, one of the biggest first movers is just the media sites themselves. A lot of these AI engines are trained on enormous corpuses of text. And so firms like Yahoo, for example, and many of the other Premier media outlets are starting to license this data to train the largest models, and that's really going to drive the first wave of this. But the second wave is going to be these more specific models, these narrower models that people are putting into the hands of consumers where they're there to perform one individual specific function, and that is going to expand the breadth of data necessary for training pretty dramatically.
- And so obviously, there's a fire hose of data that's out there, even more than ever thanks to large language models. So which companies or sectors are really leading the charge and really making the most of this, especially some of these larger companies that obviously have a lot more access to data?
BRAD SCHNEIDER: I mean, it's an interesting question. Obviously, the large companies, the Microsofts, the OpenAIs, the Anthropics, they're driving the beginning of this revolution. So they're the most data-hungry ones today. But really, the scale of those companies requires them to sell things to enormous numbers of people. So they're building the tools. If you think about the gold rush, for example, those selling the picks and shovels, were the largest of companies and the ones that sort of stood the test of time, and that's what we're seeing with these large tech companies.
But really, at least from my point of view, the innovation is going to happen with the people that are using those tools. So a lot of these companies that you have not heard of, it's going to really allow small companies to innovate and move a lot more quickly than a big company can for a variety of different reasons. Most of these companies selling the infrastructure.
Microsoft, for example, they can't be building a product that does $1 million a year in revenue. Their revenue scale is so enormous that they need to sell something to everybody. And so I think the real innovation is going to come from companies that you've heard less about, or maybe you haven't considered that AI could play a big role in.