Building lasting value from the AI revolution

Thirty years ago, Netscape made its stock market debut, ushering in user-friendly web browsing – and the tech exuberance that would inflate the dotcom bubble. The rest is history: a groundswell of start-ups, surging investment and the eventual collapse of some of the period’s most celebrated names.

That bubble may have burst, but the dotcom legacy is still going strong. It rewired how people interact and created the infrastructure, business models and risk-taking mindset that define our century. Without it, digital commerce, cloud platforms and the connected world as we know it would not exist.

Today, investment in artificial intelligence (AI) and its supporting infrastructure is surging, prompting comparisons to the early dotcom-era internet. People are wondering if the AI boom also sits on a knife’s edge; will this technology’s adoption and monetisation diffuse smoothly or will it fracture?

Of course, there are clear differences. Dominant AI firms today differ fundamentally from dotcom start-ups; AI investment is being driven by well-established companies with strong margins and cashflow; start-ups were just that. Still, competing views abound as to the sustainability of AI spending.

What will it be: AI revolution or illusion? The answer is unfolding, but I believe AI’s productivity-boosting substance will ultimately prevail, much as the dotcom era’s winners have transcended the late-1990s hype.

Laying the foundations

Then as now, the real story is the foundations being laid for long-term impact. After all, for every pets.com or boo.com that failed, there is an Amazon, a Google or an Alibaba that have demonstrated real staying power. Even Netscape’s innovations live on, including in web scripting language that makes our digital lives possible.

Despite some inevitable irrational exuberance, AI is likely to follow a similar path. Investments in chips, software, data centres and the energy to run them are laying the groundwork for the next technological and economic transformation.

The companies that combined technology with real business and consumer needs while earning the trust of customers, investors and regulators are still going strong. They understood data was fundamental and real success required scaling beyond experiments

At Swiss Re, AI is a key pillar in our efforts to advance re/insurance and create lasting value. As adoption accelerates and use cases scale, we are building the momentum necessary to thrive in an AI-powered future.

Swiss Re’s AI-powered tools are helping our claims handlers detect recovery opportunities and fraud and streamlining clients’ underwriting of complex applications. We have additional AI initiatives that have similar promise.

Successful AI

Some things have not changed. Just like in the dotcom days, AI excursions that confuse novelty with value can quickly become costly dead-end detours. As a reinsurer working with major insurers, corporations and governments around the world, our priority is to embed AI at the core of the business to transform critical insurance functions like underwriting and claims with a focus on its impact across two areas central to re/insurance: enhancing high-value knowledge work and unlocking the potential of unstructured data.

Over the past eight years, we have built state-of-the-art data and tech foundations that allow us to leverage AI’s full potential at scale, with speed and in a safe, compliant and responsible way. These foundations enable us to scale AI use cases with focus and impact, rather than falling into the trap of fragmented pilots and low-return experimentation.

Most importantly, the value of AI comes from combining AI capabilities and human expertise. Our human colleagues remain at the core, with AI playing a supporting role so experts can focus their time and talent on higher-value activities.

These principles are fundamental, especially when the excitement around AI sometimes obscures just how much discipline and structure are needed to translate promise into impact. I am looking forward to talking about this and more when I attend the World Economic Forum in Davos, Switzerland.

Not coincidentally, dotcom winners followed guiding tenets that were not so different from those I have described. The companies that combined technology with real business and consumer needs while earning the trust of customers, investors and regulators are still going strong.

They understood data was fundamental and real success required scaling beyond experiments. After all, the big winners did not stop at selling books; they reinvented global logistics.

Likewise, the AI era will produce its own leaders, with those that deploy the technology well reaping increasing gains over time.

As debate continues over AI’s future, Bill Gates’s 1996 reminder, delivered as the dotcom boom gathered steam, holds true: “People overestimate what will happen in the next two years and underestimate what will happen in 10.” AI deserves the same long-term perspective. We need to be investing not for the moment, but for sustained impact.

Pravina Ladva is group chief digital and technology officer at Swiss Re