Threat and opportunity In 2023, AI went mainstream. Increasing numbers of businesses began adopting it as a matter of course, while it served as the basis for countless new startups, permeated endless political speeches, and became used by ordinary people each and every day. And the year is still not out.

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If it was ever in doubt, AI looks set to transform how we live our lives, both at home and at work - and the disruption it will bring represents both a risk and an opportunity for entrepreneurs.

There is certainly a clash between the doomsters who claim that the overall result of the AI revolution will be unemployment for many (if not the end of humanity),25 and the 'accelerationists' who think that AI will be a general-purpose technology, similar to electricity, that could make us markedly more productive (if not save humanity).26 Of course, between these extremes, there are also many more nuanced and cautious points of view that highlight both the risks AI poses and the opportunities it offers.27

With respect to the threat of AI to entrepreneurs' business models, our survey reveals a perfect split among founders. Of those who came down on one side of the debate or the other, precisely half of the entrepreneurs we surveyed believe AI threatens their current business model, while precisely half think the opposite. Interestingly, there is also a sizable chunk who appear undecided - with 30% viewing AI neither as a threat nor not as a threat - perhaps as should be expected given how much of a recent phenomenon mainstream AI has been in the economy.

Strikingly, founders of larger businesses are more likely (44%) to see AI as a threat to their business model than founders of smaller ones (30%). Around two fifths (41%) of entrepreneurs with smaller businesses regard AI as 'not a threat', while only 27% of owners of larger businesses share that sentiment.

These results must be taken into consideration when potential outcomes of AI are being debated. Further research should focus on specific potential risks AI poses to larger businesses, and why smaller firm founders are more likely to feel immune. As this technology is still in its infancy and a consensus of its implications is nonexistent, the public debate can easily shift these perceptions.

Chart 20: To what extent is AI a threat to your current business model?

To what extent is AI a threat to your current business model?

Chart 20

Chart 21: To what extent is AI a threat to your current business model?

To what extent is AI a threat to your current business model?

Chart 21

So much for the risks; what about the opportunities? Interestingly, entrepreneurs appear to be much more optimistic here. When asked about whether AI was an opportunity for their current business model, among those giving an opinion one way or the other, 76% thought it was an opportunity versus just 24% who did not.

Again, on this question, there is more to be learnt by seeing how founders of different sorts of companies responded.

While founders of both smaller and larger businesses regard AI as a positive for them, those running larger businesses seem especially bullish, with almost a quarter of them seeing it not just as an opportunity, but as a significant opportunity. For comparison, this is three times the proportion of founders of smaller businesses.

Overall, it's striking to see that owners of larger businesses interpret AI both more of a threat and an opportunity compared to smaller business owners. This may suggest that smaller businesses see themselves safer and more stable against AI while larger businesses attempt to understand both risks and potential benefits.

Such has been the explosiveness with which AI has entered the economy and society at large, governments have scrambled to appear ahead of the curve. In March of this year, Technology Secretary Michelle Donelan said that the Government “want[s] to make sure that AI is complementing the way we work in the UK, not disrupting it - making our jobs better, rather than taking them away”.28 What our polling reveals is that, while entrepreneurs certainly appreciate the challenges AI poses, many more believe its development will be an opportunity than a threat. As policymakers proceed with efforts to regulate AI, these findings should be at the forefront of their minds.

Chart 22: To what extent is AI an opportunity for your current business model?

To what extent is AI an opportunity for your current business model?

Chart 22

Chart 23: To what extent is AI an opportunity for your current business model?

To what extent is AI an opportunity for your current business model?

Chart 23

25Steve Rose (2023). Five ways AI might destroy the world: 'Everyone on Earth could fall over dead in the same second'.
26Marc Andreessen (2023). Why AI Will Save the World.
27Bill Gates (2023). The risks of AI are real but manageable.
28Natasha Clark (2023). Brits must learn to trust latest computers and not fear AI, says Tech Secretary.