In the short span of a year, artificial intelligence (AI) chatbots that mimic the way humans interact have revolutionised how the technology is viewed and used.

Trained on large language models (LLM) – basically, by learning how languages work from large sets of data – these generative AI chatbots have paved the way for AI to be adopted at work and at home.

For start-ups, AI brings enormous opportunities. The technology could cause disruptions that enable new players to enter a market. It could also allow smaller companies to innovate at a much faster pace, creating chances to collaborate with larger companies.

In this fast-moving space, industry leaders say that start-ups should be aware of five key trends:

#1 MAKING BETTER SENSE OF INFORMATION

“Generative AI will transform the possibilities in business much like the Internet transformed access to information,” said Mr Mark Micallef, managing director for Southeast Asia, Google Cloud. “But what’s different about this revolution is that instead of an explosion of information, generative AI will make sense of the information in ways never before possible.”

Interestingly, this next generation of technology is the most approachable and flexible technology that computer science has ever built, he added. “It can solve problems that the algorithm wasn’t purpose-built for.”

This means a start-up can quickly experiment and get feedback to shape its use to solve business problems. This could be for a retail start-up building customer service chatbots to realise the possibilities of conversational business, or a fintech start-up building a tool that leverages generative AI to speed up the work of analysts and decision-making.

#2 SPECIALISED CHATBOTS

There is a saying in tech: Anything that feels like magic is called AI. The rest is just called software, said Mr Murli Ravi, co-founder of Tin Men Capital. “My home washing machine has in-built AI, but we barely notice it anymore,” he noted. “In the same way, what LLM-based chatbots can do today already feels normal, expected, bland.”

While there have been advances in how today’s generative AI responds to queries, the answers often feel like someone had polled a large committee of people and then averaged out their opinions. In other words, the bots answer questions plausibly, but do not come up with anything particularly insightful or original, said Mr Ravi. “Why? Because these bots have been trained on huge amounts of publicly available text written by real people to produce the most common responses to prompts.”

“The next frontier is not going to be about further improving general language comprehension, but about applying this capability to specific domains,” he pointed out. “Throwing a generalist bot into a specific domain – legal, logistics, manufacturing, filmmaking, agriculture – will not be as useful as companies building solutions trained on deep domain knowledge that is privately gathered and often supplied by customers themselves.” It’s something that start-ups working in this space should consider.

#3 SYNERGISING WITH FAST-PACED NETWORKS

In 2023 alone, AI has had a meteoric rise across different industries, redefining how people harness and interact with technology. One way that start-ups working on AI can deepen this impact is to work with telecom operators that provide high-speed links to users and devices in a hyper-connected future. “The synergy of 5G and AI will unlock new opportunities to build an intelligent and connected society,” said Mr Mustafa Kapasi, chief commercial officer for M1.

“Start-ups generally excel in innovation,” he added. “By bundling their innovative solutions with a robust connectivity such as M1’s, they can offer a suite of integrated managed services for various sectors like travel, payment solutions and healthcare.”

“Many companies are already running proofs-of-concept to assess how generative AI can be used for greater impact in driving operational efficiencies or improved services,” he added. “Start-ups contribute towards developing solutions for building smarter and more sustainable cities, too, as their agility allows for quicker experimentation and implementation of innovative ideas.”

#4 MAKING PAYMENTS SAFER

One way that start-ups can make use of AI is to fight fraud and make a difference in a key component of a digital economy – payments. By working with established players such as Mastercard, start-ups can bring their AI innovation to the global stage.

For example, Mastercard’s start-up engagement programme, Start Path, helps start-ups commercialise their ideas faster with Mastercard’s technology, solutions, expertise and network. The global technology payments company has supported nearly 360 start-ups globally through this programme since 2014, and these companies have gone on to raise more than US$15 billion (S$20 billion) in post-programme capital.

“In the space of digital trust, new technologies deployed by large entities may end up coming from start-ups or fintechs that have been able to develop innovative ways of using AI to fight fraud,” said Mr Safdar Khan, division president, Southeast Asia, Mastercard.

The rise of AI, particularly generative AI, has revolutionised commerce, e-payments, and even cybersecurity and digital trust. “Even as bad actors adopt AI, the democratising effect of technology is also empowering more entities – including start-ups – to play an active role in strengthening cybersecurity and digital trust,” said Mr Khan. “The possibility that even the smallest entities could play a decisive role in securing the digital ecosystem inspires optimism about the future,” he added.

#5 USING THE TECHNOLOGY RESPONSIBLY

There is growing concern on the impact of AI, especially how it could drastically change the world. Increasingly, industry leaders are coming together to chart a positive path forward. For example, the inaugural Singapore Conference on AI (SCAI), which opened on Dec 4 and was held by the Ministry of Communications and Information and the Smart Nation Group, gathered global AI experts to forge consensus on critical questions on AI development and deployment. The three-day event sought to bring together a purposeful convergence of AI expertise, adopt a systematic approach to AI challenges, and inspire talent and focus attention towards the global good.

The age of AI is too important for us to sleepwalk into, said Minister for Communications and Information and Minister-in-charge of Smart Nation and Cybersecurity, Mrs Josephine Teo, at the opening of SCAI. “Particularly, as a small country, constrained by the size of our workforce, AI’s potential as a force multiplier holds much promise, provided we also help our people adapt effectively,” she added.

She also spoke about Singapore’s approach of embracing AI innovations while being committed to confronting risks that come with AI systems.