The sudden

The sudden rise of generative artificial intelligence (gen AI) has led major technology companies to invest billions. However, for just $20 a month, small businesses can begin leveraging gen AI to significantly impact their operations and growth potential. This affordable entry into gen AI could be a game-changer, according to Karim Lakhani, a Harvard Business School professor who has studied technology for 30 years.

Lakhani highlighted the enduring truth of an old adage in computer science: “Machines won’t replace humans, but humans with machines will replace humans without machines.” He shared this insight during CNBC’s Small Business Playbook virtual event.

For small business owners, Lakhani recommended starting their AI journey by exploring three platforms: OpenAI’s ChatGPT+ (available for $20 a month), Microsoft’s Bing Chat (free), and Poe, which provides access to various gen AI tools. Experimenting with these tools will quickly demonstrate their power in enhancing core business tasks.

Lakhani identified three key areas where gen AI can be particularly beneficial for small businesses:

1. All consumer contact

2. As a thought partner for new business ideas

3. As a “super assistant” handling routine tasks

Despite criticisms about gen AI producing “hallucinations” or inaccurate results, Lakhani advised business owners not to be deterred. The real value lies in AI’s ability to lower the cost of cognition and generate new ideas.

For instance, Lakhani recounted the experience of a venture capitalist in California who worked with immigrant entrepreneurs in the lawn care and fencing industries. These business owners struggled with English, making translation services expensive. Using ChatGPT, they could convert “broken English” into polished language, significantly enhancing their communication capabilities at minimal cost.

This advantage also applies to e-commerce vendors on platforms like Shopify, who can use gen AI to translate websites into multiple languages, avoiding the high costs of traditional translation services.

Gen AI can also assist in handling customer communications. Small business owners can use ChatGPT to draft responses to irate customer emails, providing a range of options to address complaints effectively. This tool is equally useful for crafting positive customer communications and marketing copy.

When it comes to social media campaigns across platforms like Facebook, X (formerly Twitter), and TikTok, ChatGPT can generate implementable ideas, acting as a collaborative partner. Additionally, gen AI image generation tools such as Midjourney, DALL-E, and Stability AI can enhance visual content creation.

Lakhani emphasized that AI will be crucial for three key business success factors: scaling, scoping, and continuous learning. AI can help businesses serve more customers, create more products and services, and foster ongoing learning. It can supercharge the operating model and value delivery.

To begin learning about AI, Lakhani suggested turning to YouTube, which offers numerous tutorials and crash courses on ChatGPT and gen AI. He stressed the importance of practice in understanding both the benefits and limitations of AI tools.

In his academic career, Lakhani uses gen AI as a thought partner, sparring partner, and copy editor, appreciating its patience and responsiveness. He encouraged small businesses to start their AI journey, taking advantage of their agility compared to larger, more bureaucratic organizations.

Lakhani likened ChatGPT to an Ironman suit: “Tony Stark is not a superhero or a god. He is just a human being. This is what gen AI and AI tools can do for every worker. It’s your AI power suit. A team of 10 can have a footprint of 1,000.”

Lakhani also noted that gen AI tools could revolutionize various industries by increasing efficiency and productivity. For example, AI-driven customer support can reduce response times and improve customer satisfaction, while AI-powered data analysis can provide deeper insights into market trends and consumer behavior, enabling businesses to make more informed decisions.

In addition, gen AI can help small businesses with inventory management by predicting demand and optimizing stock levels, reducing waste and improving profitability. AI can also enhance cybersecurity measures, protecting businesses from potential threats and data breaches.

As the technology continues to evolve, the potential applications of gen AI will expand, offering even more opportunities for small businesses to innovate and grow. By staying ahead of the curve and integrating AI into their operations, small businesses can gain a competitive edge in an increasingly digital world.

Lakhani’s insights underscore the transformative potential of gen AI for small businesses, highlighting the importance of embracing new technologies and continuously learning to stay competitive. With the right tools and mindset, small business owners can leverage AI to drive growth, improve efficiency, and achieve long-term success.