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Comment by blensor | Hacker News Reader

A company that needs to be protected from the market to be successful in this very same market, isn't this a fallacy?

Trying to create a startup that can't at least compete with the existing solutions isn't a very good business strategy in my opinion.

That's what academia is for. Research that is still too far away from being profitable but that has it's merits in the long run.

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The claim is that there may be a market for AI-powered technologies, but that market is suppressed by non-AI competitors exploiting information asymmetry.

Wouldn't that suggest however that AI is not the best tool for the job? AI should be the great equalizer if the tech actually was useful, but I have seen precious few examples. The usual triumphs are almost all actually human sourced and then delivered by algo. (google image, etc.)

No, the point is that dishonest marketing distorts the market. The companies use human labour to deliver useful services, but falsely advertise as AI-driven to capitalize on the novelty factor. This makes life more difficult for both companies delivering the same service, but advertising honestly, and for companies actually trying to deliver the product by means of AI. The result is that money flows to dishonest people, instead of honest people and/or people actually trying to push technology forward.

This is an issue if the non-AI company using humans is not profitable (supported by VC funding) with the goal of "eventually replacing humans with AI". If they are not transparent to investors about this point, then investors may have preferred to invest in a company that already has AI that works well enough (but not as well as the humans in the first company). Perhaps the first company will never be able to build the AI, leading to a market failure.

But they should be honest about their claims. Perhaps the customer is expecting that humans don't process their personal information on a routine basis.

Not really - Korea protected Samsung et al for years before they were capable of competing globally.

Also, many of the largest internet businesses in China started out as cheap imitations of western websites, but gained success as the western versions were blocked by the great firewall. The Chinese government has basically propped up their own industries by shutting out the west, and are now screaming about "protectionism" when the west is finally responding.

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