Vertical AI Tools Disrupt
A broad range of vertical market AI tools are appearing on the burgeoning AI scene.
The explosion of these role-based tools is reminiscent of the development of specialized, vertical SaaS offerings that has continued for two decades. But like everything AI, this time it’s happening very, very fast, which means the disruption these solutions bring is also coming fast. (This post written in early 2024)
Some Current Examples
LAW- Harvey is an AI tool that is causing a storm of interest. It supports attorneys in a range of tasks such as contract analysis, regulatory compliance, and due diligence. Though it’s not yet in full release, the tool has already been adopted by some large law firms and it is rumored that PwC will soon adopt it for their legal staff as well. In fact, demand for Harvey is so high that the only current option to attain it is to get on the wait list for “early release” access. harvey.ai
MEDICINE- Abridge was just adopted by UCI Health, the health system of the University of California. This vertical AI tool converts patient-clinician conversations into structured clinical notes in real-time, saving clinicians the burden of note writing and thus returning hours per day to doctors that they can use for actual interaction with patients. (The company reports savings of up to 40 minutes per patient encounter.) Medicine has long been a target of AI technology, and integration of such AI applications into the crowded clinician workflow solutions space finally seems certain. abridge.com
TAX- TaxGPT is one example of a tax AI assistant that can be used by tax preparers or by individuals & businesses. Like other vertical AI offerings, tax assistants take advantage of a restricted domain of knowledge to train the AI, while the specific rules within the tax space seem custom made for the structuring of AI Remediation and Guard Rails that are part of AI training and operation. taxgpt.com
In these and innumerable other domains where specialized AI tools are, or will be developed, the competition is and will continue to be heavy, just like within SaaS. Of course, current vertical market SaaS solutions are already in a hot competition to develop their own AI functionality. Then too, many stand-alone vertical AI solutions will exit when acquired by such companies.
All of this frantic activity is bound to be disruptive, with some SaaS offerings discovering that a key part of their reason for being has been supplanted by an AI app, or as modest products are catapulted into prominence by the addition of a particularly powerful AI integration. Vertical market products will either grow stronger with AI or reach obsolescence. So too will employees either gain through AI amplified productivity or become extraneous.
But then, vertical is always the direction of progress. And progress is always disruptive.
Bill Haines, Partner