To Be Or Not To Be ‘AI-Native,' That Is The ‘Only' Question

Forbes

a day ago

To Be, or Not to Be: That is the Question
I know! I butchered the quote by William Shakespeare. But in a world that is increasingly driven by AI, companies no longer have the choice 'to be or not to be' 'AI all in' (see my last article) if they want to grow and prosper. Consequently, adding AI to your business is not a real choice. Rather, today's choice is singular in nature -- how are you going to become AI-Native and do what it takes to achieve that result? That is the core question I will seek to answer in this article including the processes for getting there.
You Can't Outrun an AI-Native Company
Nvidia is First $4T Company
There's a quiet divide forming in the AI race best epitomized by Nvidia becoming the most valuable company in the world. On one side of this divide: legacy software (SaaS) and hardware companies are adding AI to what they make and sell versus AI-Native companies that are AI to their bone (think Microsoft adding Co-Pilot via OpenAI versus OpenAI itself; Google Gemini versus Perplexity; or Cursor AI versus Adobe with or without Figma). When you look at these examples, you can clearly see the distinction.
It is not to say that the 'Hyper-Scalers' don't have the money, networks, marketing muscle and data to win over the long run – they surely do. But they are in a world all by themselves - they can literally afford to spend hundreds of billions each to catch up and remain relevant. However, for the rest of the world, which means all of us - it is not that simple as spending billions or more to play catch up. Even Elon Musk is learning this lesson the hard way with Grok. Therefore, every company needs to truly look inside to see if they have the internal fortitude to do what it takes to transform.
Leaders are not stupid (at least not most of them). Consequently, many companies are beginning to 'rebrand' themselves as AI companies to ride the AI bandwagon. You see it in their press releases, public announcements, websites and even investor communications, regardless of whether they are private or public companies. BUT THEY ARE NOT AI Companies. The difference in their outcomes – revenue growth, valuations, customer adoption, employee skills, product offerings and code base - is massive and growing exponentially every day. Think of the digital divide of 10+ years ago and multiply it by 10x or 100x and you get the point.
To be part of the AI revolution is about the very essence of your company. Ask yourself WHO is on your board -- are they AI-Native? WHAT is the composition of your management team -- are they AI-Native? HOW do you go to market -- is it AI-Native? And WHAT is the foundation of your technology -- I know you know the question: Is it AI-Native? Asked differently, is AI an enhancement to what you are already doing or is it the very foundation of your thoughts, actions and capital allocations? How you answer every one of these questions, and many more, will shape whether you are part of the AI revolution or just a bystander.
AI-Enabled versus AI-Native: Which are you?
AI-Enabled vs. AI-Native Platforms
Let's start with some simple definitions:
Three points of clarification:
1. AI-Native is NOT hiring McKinsey, Bain or BCG, or some other consultant or communications firm, to reshape your company's strategy. Nor is AI-Enabled about partnering with an AI company, like Accenture did with Palantir, or using Lovable or Cursor to create new applications (many companies are doing that).
2. AI-Enabled and AI-Native are also NOT about replacing your people with AI agents (aka: what Duoloingo or Klarna tried). IMHO, using AI is about doing things you couldn't do before at speeds you thought were unimaginable (hitting $10B in valuation in 2 years, like Cognition did).
3. Whether you are AI-enabled or AI-native, I continue to witness that the best business models still focus on network effects and data moats to ensure their long term survival. This is even more true as foundational models become obsolete and their cost of compute plummets.
The Real Danger for Leaders, Investors, and Board Members: Your Thoughts
Your Thoughts Become your Actions and Outcomes
As you ready your board, investors and leadership team for one of these two journeys', remember that your thoughts, and the thoughts of your leaders, board members and investors, will drive the corporate words, actions, habits, and in time destiny and outcomes of your organization. So, let's start where it all begins - with your thoughts.
Winning Goes to Those That are All In on AI
All in on AI
My friend and frequent co-author, Tom Davenport, recently wrote a book called All in on AI. In it, he explains why being All in on AI is so critical to success. From my perspective, the difference between AI-Enabled and AI-Native isn't just technical — it's existential. One is about efficiency. It's about advantage. Its about speed, scale and defensibility. As noted above, AI-Enabled companies improve what already exists. AI-Native companies change the world and how everything is done. The later companies understand deep down that AI is bigger than the internet; it's bigger than hardware and software and it's bigger than mobile, data and communications. It is all those things combined. In fact, it is derived from and built upon all those advancements.
In our new AI world, the risk for all investors, board members, and leaders isn't doing too much — It's not doing enough, fast enough or deep enough. It's about everything that Wiliam Shakespeare imagined when he asked – To be or not to be that is the question. If he was born and writing today, I am sure he would have added AI to his question and probably used ChatGPT to write Hamlet. Given all these realities, it is up to you, which way you go – do nothing, become AI-Enabled or go all the way – become AI-Native. Given ONLY you control your thoughts and your actions, and given your actions dictate your outcomes, I suggest you start today and truly understand your thoughts and figure out what is holding you, and others back (including your board and team) from achieving your organization's full potential in the age of AI. Without that true understanding, nothing is really possible.