{"id":31960,"date":"2025-01-16T21:37:45","date_gmt":"2025-01-16T21:37:45","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/internet-business\/the-horizontal-enabling-layer-by-gennaro-cuofano\/"},"modified":"2025-01-16T21:37:45","modified_gmt":"2025-01-16T21:37:45","slug":"the-horizontal-enabling-layer-by-gennaro-cuofano","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=31960","title":{"rendered":"The “Horizontal Enabling Layer” – by Gennaro Cuofano"},"content":{"rendered":"


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Jeff Bezos uses a simple mental model for the current AI paradigm as <\/span>“a horizontal enabling layer.”<\/strong> <\/span><\/p>\n

I could not find the best analogy for it to understand the level of transformation that it might create as a layer on top of everything. <\/p>\n

This issue is dedicated to a thought I\u2019ve been having since the\u00a0<\/span>ChatGPT Moment<\/em>, which I\u2019m structuring today, and also to express the core difference between web technological development and this current AI paradigm.<\/span><\/p>\n

They might seem similar from a superficial look, but they\u2019re not; it\u2019s a different story. <\/p>\n

In the AI Supercycle, I did explain the implications of it, and the current AI Paradigm, driven by a new type of chip, the GPU, might be way more similar to the microchip:<\/a><\/strong> <\/a><\/p>\n

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The Web\u00b2: The AI Supercycle<\/h4>\n<\/div>\n<\/div>\n

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Instead, in this issue, I want to focus on the core difference between the web and how it developed vs. how AI might develop instead. <\/p>\n

It all starts with the following: <\/p>\n

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While the Internet\/Web paradigm started to integrate into the economy as an information layer (outside-in), thus starting from the outer layer, moving all the way to redefine the core of the value proposition, the AI paradigm has the potential to move in the opposite direction (inside-out) by redefining the value prop first, then moving on the distribution layer; this might have a few practical consequences and lead to a much broader economic impact.<\/em> <\/span><\/figcaption><\/figure>\n<\/div>\n
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When a new major tech paradigm emerges, it might mainly start from the outer layer. <\/p>\n

For instance, when the Internet picked up, it was initially integrated as a distribution channel and, over time, as a value proposition definer, getting embedded into the core of a product.<\/strong> <\/span><\/p>\n

An outside-in transformation.<\/strong> <\/span><\/p>\n

In short, if you think of the parallel with the Internet. Back in the mid-90s, you got a retail store, put it online, and you got more stuff sold. <\/p>\n

Indeed, Amazon is a great example. <\/p>\n

Amazon started as an e-commerce and turned into a platform. <\/p>\n

Thus, it transforms from a distribution advantage to completely reshaping its value proposition.<\/p>\n

Or the shift between a simple value, <\/span>\u201cwe sell a wide variety of books online, delivered to you fast,\u201d<\/em> to a multi-pronged value like <\/span>\u201cwe help you build your business on top of our platform to sell a massive variety of stuff, cheaply and delivered fast.\u201d<\/em><\/p>\n

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Amazon’s transformation: beginning as an <\/span>online bookstore<\/strong> focused on distribution (1994), evolving with <\/span>value-enhancing innovations<\/strong> like one-click ordering and Prime membership (1997-2005), and finally achieving <\/span>core transformation<\/strong> into a platform business (2006 onward), leveraging AWS, third-party marketplaces, and a global logistics ecosystem.<\/span><\/em><\/figcaption><\/figure>\n<\/div>\n

This has resulted in this sort of evolution. <\/p>\n

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Also, here, we saw a good chunk of it evolving from the outer layer to the inner layer: <\/p>\n