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Cultivating Precision: The Unique Advantages of Vertical AI

With targeted data and industry expertise, Vertical AI is transforming the landscape for businesses seeking a competitive edge in niche markets.
11/4/2024

In all areas of modern business, especially on the global stage, we are captivated by the promise and potential of artificial intelligence to uncover new opportunities and optimize our efforts. We are only just beginning to discover the huge potential of how machine learning can build disruptive technology that adds value. 

As companies and enterprises begin to utilize these systems, there have been some fascinating learnings about their immediate returns. While technology has created a fertile playground for innovation, it has become apparent that not all AI platforms are created equal. While Generative AI offers broad applications capable of addressing a wide range of tasks, there are significant data gaps that limit its effectiveness in certain industry verticals (like travel, for example). This has created an enormous opportunity to develop more effective Vertical AI systems, with data and language capabilities targeted to individual categories.

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ARE YOU A PARK OR GARDEN?

Imagine for, a moment, a large public park. It offers a wide variety of plants and flowers, and is enjoyed by a wide range of people looking to enjoy some time outdoors and perhaps learn a bit about the most popular trees and animals.  But the soil is fairly average, capable of growing the most common plants but more difficult terrain that can’t develop more exotic or specialized species.  Yes, it caters to the biggest audience, but the park is simply not capable of providing the specific nutrients or attracting the right pollinators for each type of plant. 

The park in many ways is like Generative AI. It can grow, but it’s not as robust or targeted as some categories need to utilize specialized data and inputs.

Now imagine a garden. It may be smaller in scale, but it contains the rarest, most nutrient-rich soil, and a vast network of bees and butterflies that help pollinate the plants. The garden flourishes quickly because it has both the best resources and best helpers, tailored specifically to the needs of each plant species. The garden can deliver more beautiful flowers and fruit because it has been developed specifically to serve that purpose.

The garden, of course, is Vertical AI. These intelligence systems excel in specific domains by leveraging specialized knowledge and relationships to deliver highly targeted and effective solutions that Generative AI systems can’t deliver.

HOW TO MAKE VERTICAL AI WORK

The travel industry, for example, is highly specialized and uses specific language and data that generative AI systems struggle to understand. Vertical AI systems, on the other hand, are designed to enhance productivity in specific sectors by understanding industry-specific jargon and terminology in ways that more general tools can’t.

That gives Vertical AI a significant advantage, and is why so many customers choose cloud-based solutions (Software as a Service) instead of their own enterprise solutions.  However, there are significant challenges to building a successful, cost-efficient Vertical AI that can be scaled quickly and efficiently:

  • THE COST (AND QUALITY) OF DATA: High-quality, consistent data is obviously essential. Most companies need to invest in outside, third-party data sources that are prohibitively expensive or difficult to obtain.
  • CUSTOMER ACQUISITION: The costs of acquiring customers ready and willing to engage with new AI platforms is also a major cost consideration.

The winners in Vertical AI need to find ways to solve these two challenges, or face enormous costs that will present obstacles to profitable growth.  Companies with access to extensive data and established customer relationships are at an enormous advantage, as they can minimize the massive data and customer acquisition costs at launch, allowing them to scale their Vertical AI platforms quickly and profitably.

With Vertical AI, there is so much to be learned, but even more to be excited about. In the travel category alone, there are huge opportunities in areas like price prediction, data mapping, fintech, and advertising technologies that can revolutionize the industry.  Travel data platforms must dedicate themselves to growing a true and bountiful garden of AI-driven solutions, one nourished by the rarest soil (data) and tended by the most dedicated pollinators (customers).  For Vertical AI platforms to succeed, every bloom needs to tell a story of precision, care and unparalleled growth. 

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