AI Time

Nathan Banaich of Air Street Capital is one of the Industry luminaries that we track. We enjoy thumbing through his annual report on the State of AI, which has important takeaways on current state, and compelling insights on emerging state. We thought the timing (no pun intended) was right to look at 2025.

The AI revolution is not only accelerating, but AI-first companies are outpacing their traditional counterparts at an unprecedented rate. According to Stripe data, AI-first companies founded post-2020 are scaling at nearly triple the speed of legacy SaaS firms, hitting $30M+ in revenue in just 20 months versus 65 months for traditional businesses. This is a clear wake-up call for companies still hesitating on their AI strategy. And the message here isn't just for software companies.

The acceleration in growth through AI adoption reminded us a landmark study we cited two years ago about time-based competition across Industries. We recounted how companies achieved remarkable profit performance over competitors when they gained a time-based advantage in delivery. The citation here that AI adoption accelerates market performance is not a surprise. Afterall, behind AI-first is time-based performance.

So now what?

As with any technology, healthy skepticism is the right approach when evaluating the fit with your business. But in the last 12 months, we've turned a corner, with increasing quality performance among language models, and remarkable utility among 'intelligent apps' that have been released to market. We've noted the limits of AI in our research and projects, and the breakthroughs in recent months. At this time, it is important for all businesses to be examining the potential fit for their business, and exploring prototypes were possible.

Here are a few ideas on how to get started:

1. Stick with a Few Well-Funded AI Partners

The AI landscape is volatile. Partnering with well-capitalized AI providers ensures stability and long-term support. Companies that spread themselves too thin across multiple vendors risk inefficiency and unmaintainable integrations.

2. Preserve your Options with Pluggable Architectures

Flexibility is key as you're looking at options and partners for AI applications. Businesses should prioritize modular architectures that allow seamless upgrades to new AI capabilities. Avoid rigid, monolithic systems that can’t evolve with the rapid pace of AI advancements.

3. Get Moving on Business Use Cases

The time for prolonged deliberation is over. Companies should actively identify, prototype, and deploy AI use cases that drive measurable business value. Waiting for perfect clarity will only result in missed opportunities.

4. Embrace Active Experimentation

AI-first companies win because they iterate fast. The best approach is not prolonged study but continuous experimentation. Be willing to make mistakes and learn from them quickly. AI success isn’t about getting it right the first time—it’s about learning faster than the competition.

5. Retire Legacy Systems: Shift from Process to Cognitive

Traditional business processes must evolve. AI allows organizations to move beyond rigid process-driven workflows and embrace cognitive automation—where models make intelligent, dynamic decisions. Legacy systems that can’t adapt should be phased out.

The Market Signals Are Clearly Optimistic

AI adoption isn’t just hype—it’s driving real enterprise value. A few analysts estimate that the AI sector has surged to $9 trillion in enterprise value, and public markets are rewarding companies that successfully integrate AI into their operations. Despite regulatory headwinds, AI-first businesses continue to thrive, and investment in private AI firms remains strong.

At the same time, governance challenges loom. While AI regulation is advancing—through the EU AI Act, California’s proposed AI policies, and global summits—disagreements over governance persist. The regulatory landscape is still forming, but businesses can’t afford to wait for clarity. Instead, they should prepare for compliance by embedding ethical AI principles and transparency into their workflows now.

The Takeaway: Do You Have a Plan to Start?

We recognize the challenges. We also firmly believe that every business must actively explore AI applications to stay competitive. The future belongs to those who move decisively, leveraging AI to drive innovation, efficiency, and strategic advantage. Time-based competition is real, and the businesses that embrace AI today will emerge as the time-based competitors of tomorrow.

Give us a call so that we can explore together how to accelerate your business intelligently.