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The Shifting Sands of AI: Why Enterprise Leaders Need to Look Beyond OpenAI

The Shifting Sands of AI: Why Enterprise Leaders Need to Look Beyond OpenAI

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A Rapidly Evolving Landscape; OpenAI's Disappearing Moat

We've been watching the generative AI landscape transform at breathtaking speed, and what concerns us most is how quickly the narrative around OpenAI has shifted from "unassailable market leader" to "company facing existential challenges." As leaders who have spent our careers at the intersection of technology, policy, and enterprise strategy, we believe that organizations making multi-million dollar AI investments need to understand the broader context beyond the marketing hype.

The concept of a "moat" in business refers to sustainable competitive advantages that protect a company from competitors. OpenAI's initial moat was built on first-mover advantage, technical superiority, and massive funding. All three pillars are now showing significant cracks.

Microsoft—OpenAI's primary backer—has began testing outside models from xAI, Meta, and even Chinese company DeepSeek. Simultaneously, Apple appears to be reconsidering its OpenAI partnership, now engaging with Google about Siri integration. These moves by two of the world's most valuable companies signal serious concerns about OpenAI's trajectory.

The technical superiority argument is also collapsing. OpenAI's rushed GPT-4.5 release shows a 30% error rate—significantly worse than both Anthropic's Claude 3.7 and xAI's Grok3. When your core product is underperforming relative to competitors, enterprise customers take notice.

 

Competition Is Intensifying; The Economics Don't Add Up

While OpenAI struggles, competitors are gaining momentum. Anthropic secured a $3 billion investment from Google and released Claude 3.7, which many consider technically superior to OpenAI's offerings. Elon Musk's xAI launched Grok3 with impressive deep research capabilities. Even OpenAI's former CTO, Mira Murati, launched Thinking Machines Lab and raised $2 billion at a $9 billion valuation in just two weeks.

And we can't ignore developments from China. Within the last few weeks,they announced what they described as the world's first fully autonomous AI agent, called Manus. Unlike some overhyped Western announcements, Chinese AI capabilities have generally delivered on their promises. This represents both competitive and geopolitical considerations for enterprise leaders.

The financial picture is equally concerning. OpenAI is reportedly burning through $1 billion monthly and could lose up to $44 billion by next year. Sam Altman himself admitted they lose money on every $200/month ChatGPT subscription. Their recent announcement of enterprise offerings priced between $2,000-$20,000 monthly appears to be a desperate attempt to stem these losses.

This pricing strategy reveals a company pivoting toward enterprise customers out of necessity rather than strength. But this market is already dominated by Microsoft, Amazon, and Google, who have decades-long relationships with Fortune 500 companies. OpenAI faces an uphill battle against entrenched competitors with deeper pockets and broader offerings.

Despite the recent headline-grabbing $40 billion funding round that catapulted OpenAI's valuation to $300 billion and reports that the company's revenue has grown by 30% in three months, the company still doesn't expect to break even until 2029—four years from now! This timeline raises serious questions about the sustainability of their business model, especially as they continue to burn through cash at an alarming rate.

In a telling strategic pivot, OpenAI has also announced plans to launch an open-weights reasoning model that developers can run on their own hardware. This represents a significant departure from their closed system subscription model and suggests an acknowledgment that their current approach may not remain competitive in the long term. This move appears to be a course correction in response to mounting pressure from both open-source alternatives and competitors offering more flexible deployment options.

 

Strategic Implications for Enterprise Leaders

For CEOs, CTOs, CIOs, and CMOs, these developments necessitate a more sophisticated approach to AI strategy. The days of simply "partnering with OpenAI" as a complete AI strategy are over. We believe enterprise leaders need to consider:

  • Geopolitical factors: How will US-China tensions affect your AI supply chain? What regulatory frameworks are emerging in different regions?

  • Economic sustainability: Are your AI partners financially viable for the long term? What happens if they significantly raise prices or pivot their business models?

  • Technical diversification: How can you build an AI architecture that isn't dependent on a single provider?

Enterprise clients can implement what we call a "multi-modal, multi-model" approach. This means leveraging different AI models for different use cases and maintaining the flexibility to switch providers as the landscape evolves. The companies that will win in the AI era aren't those that pick the "right" vendor today, but those that build adaptable AI architectures.

OpenAI's current valuation approaching $300 billion seems increasingly disconnected from economic reality. While they deserve credit for catalyzing the current AI revolution, enterprise leaders need to recognize that we're entering a new phase where multiple players will drive innovation.

The next 18 months will be critical. We'll see consolidation among smaller AI companies, continued heavy investment from tech giants, and potentially surprising moves from nation-states viewing AI as critical infrastructure. Enterprise leaders need to stay informed not just about the technology, but about these broader market and geopolitical dynamics.

The bottom line for enterprise leaders: your AI strategy needs to be as sophisticated as the technology itself

Look beyond the hype, consider the full spectrum of factors at play, and build flexibility into your approach. We believe the latest "wave" of the current AI revolution is just beginning, and the winners will be those who navigate its complexities with clear-eyed strategic thinking.

 

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Cornerstone Workforce AI: What It Is, What It Does, and Why You Should Start Now

Cornerstone Workforce AI: What It Is, What It Does, and Why You Should Start Now

Holger Mueller sat down with Cornerstone OnDemand's Suchi Upadhyayula in New York, on the day they launched Cornerstone Workforce AI. Here is what customers need to know.


What Cornerstone Workforce AI Actually Delivers

Let's start with what is new for existing customers. If you are on Cornerstone's learning platform today, meaningful AI innovation is arriving for you right now.

  1. First, there is a course assistant. This is built directly into the learning experience and helps learners go deeper on topics they care about, complete quizzes, and engage with content in a more interactive way than was previously possible. It is a better learning experience, not just a chatbot bolted on top.
  2. Second, there is an adaptive learning agent with role-play capabilities. This is significant. The ability to practice what you have just learned in a simulated scenario within the same platform closes a gap that traditional learning management systems have never been able to address. You learn. You practice. You retain.
  3. Third, for customers on the talent platform, there are new assistive features for performance reviews. Nobody loves writing performance reviews. Managers dealing with 360 feedback across large teams lose meaningful hours every cycle. Cornerstone is now helping surface that work faster with AI assistance, both for the person writing the review and for the manager synthesizing feedback.

The Intelligence Plus Package

These capabilities land differently depending on your current setup. If you are a Learn Plus customer, you get meaningful new functionality out of the box at no additional cost. If you are looking for more agentic, outcome-based capabilities, that is where Intelligence Plus comes in. The tier structure is logical, and the on-ramp is designed to let customers build from where they are rather than rip and replace.

Custom Workflows and Forward Deployed Engineers

Beyond the packaged capabilities, Cornerstone is now offering something more bespoke. If you have a specific outcome in mind, say, a custom onboarding flow tailored to your organization's brand and business processes, Cornerstone will send forward-deployed engineers to build it with you. This is a meaningful shift. It is not a vendor handing you a product and leaving. It is a co-creation model that takes your nuances seriously.

This approach is gaining momentum across enterprise software, and Cornerstone is leaning into it correctly.

MCP Support and the Open Platform Play

One of the more technically interesting announcements is MCP support. Cornerstone has built a trusted data platform as its foundation, layered strong APIs on top of it, and is now exposing those APIs as MCPs. In practice, this means that if your organization is already running Claude, OpenAI, or another agent platform of your choice, you can connect directly to Cornerstone's data sources and capabilities via standard MCP protocols.

The result is a flexible, composable architecture. Your enterprise decides which agent platform to use. Cornerstone's data and functionality connect to it. The learning content meets employees where they already are, in Teams, in Slack, in whatever tools they use every day. That is the right design principle, and it is good to see it in practice.

Skills Without the Spreadsheet

One of the sharpest observations in the conversation was about how skills are actually built and detected. Nobody wakes up in the morning thinking about which skills they need. They wake up, go to work, and do tasks. A Java developer who needs to learn Python is not thinking about skill acquisition. They are thinking about getting their work done.

Cornerstone's approach to skills detection is task-based rather than declarative. Instead of asking employees to fill out yet another skills inventory spreadsheet, the system infers skills from what people are actually doing. That is the right direction, and it sidesteps one of the oldest failure modes in HR technology.

Making Your Content AI-Ready

Most Cornerstone customers have rich learning catalogs assembled over the years. The challenge is that a catalog sitting in a system is not the same as that catalog being accessible to AI. Cornerstone is launching assistive tools to help customers curate, select, and vectorize their existing content to make it AI-ready. User-generated content can be promoted to AI visibility with a single step. It is a practical, low-friction path to getting value from what already exists.


Start Now

The most important piece of advice from this conversation is simple: start the journey now.

There are still many organizations sitting on the sidelines, waiting to understand exactly how the AI inference works, whether compliance requirements are met, and whether the timing is right. Cornerstone's message is that they are here to help navigate those internal approval processes. But the deeper point is this: the innovation cycle in this space is no longer yearly. It is quarterly at best and monthly at worst. If you wait for a perfect moment, you will spend the rest of the year catching up to organizations that started six months ago.

You do not need to have it all figured out. You need to get started, learn from it, and build from there. That is exactly what Cornerstone is building toward with its co-creation model, and it is the right instinct for where enterprise AI is right now.

Human to the power of AI. That is the frame Suchi closed with, and it is a good one.

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The Future of Enterprise Resource Planning (ERP) in the Age of AI

The Future of Enterprise Resource Planning (ERP) in the Age of AI

A lot of folks think they can slap an agentic AI on top of an Enterprise Resource Planning (ERP) and get to modernization. They're wrong. And we know this because we've been talking to over a hundred early adopters who are in the middle of this transition right now, and they're telling us directly: it doesn't work that way.

Here's what's actually going on.


The Myth of Easy AI Modernization

You can't bolt AI onto a system without expecting something to break. The questions that matter are deeper than the AI layer itself. Where does the data connect? Where does the business logic live? How do you get to the last mile of experience? These are hard questions, and they don't get answered by adding an agent on top.

AI expertise is now a commodity. Everyone has it. The real differentiator is what you're using AI for, specifically building experiences, connecting value chains, and designing for both human and machine scale. That's the work. That's where the value is.

ERP Systems of Record Are Gold

Here's what the SaaSpocalypse crowd keeps getting wrong. ERP systems of record are not going away. They are the core of your business information and logic, and they are not easily replaced. The distribution, the SaaS delivery, the global systems integrators, the client relationships, and the support infrastructure built around these systems, that is a moat. A real one.

Constellation's position is clear: core ERP systems are not only going to survive AI displacement, but also serve as the foundation for the agentic AI revolution. The modernization happening right now is being built on top of ERP, not in spite of it.

What Modern ERP Actually Looks Like

The shift is real, but it takes time. Here's how it maps out.

Traditional ERP is screen-based. Modern ERP is headless and machine-to-machine. Decisions today are human-heavy. In the future, they will be highly machine-automated. Logic today is heavily deterministic. In the future, it will be probabilistic and eventually counterintuitive. Data today lives in static schemas and large databases. In the future, it will be ontology-driven and microservices-based.

These are not incremental changes. They are architectural ones. And that is exactly why you cannot just slap an agent on top and expect things to improve. We learned this lesson with RPA. The same mistake is being made again. If the core is not modernized, nothing built on top of it will reach its potential.


Three Big Shifts to Watch

First, the machine-to-machine world is here. Whether it is deterministic automation for known workflows or probabilistic decision intelligence for more complex choices, the question of when and where a human is inserted in the process is becoming the most important design decision in enterprise technology. We learn from those insertions. We train on them. We improve.

Second, OT and IT are converging. Operational technology and information technology are coming together, with decisions happening at the edges. This is going to change quality, supply chains, and safety in ways we are only beginning to understand.

Third, security is not optional. We are building for a post-quantum world. Anthropic's research into finding software vulnerabilities is just one signal that the threat surface is expanding. Token economics and security concerns are also driving a meaningful shift back toward on-premises deployments, and zero-trust security protocols are being reexamined hard.


The Bottom Line

ERP is not dead. It is not being replaced by AI. It is being transformed by it, slowly and carefully, on top of a foundation that took decades to build.

The organizations that understand this, that invest in modernizing the core rather than papering over it with agents, will be the ones that reach the autonomous enterprise. The ones that don't will find themselves rebuilding from scratch, just like the companies that bolted RPA onto broken processes and wondered why nothing got better.

These are the trends shaping the next era of ERP. We are watching it all closely.

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Tokenmaxxing, DAM, and the AI Blind Spot in Professional Services | ConstellationTV Episode 130

Tokenmaxxing, DAM, and the AI Blind Spot in Professional Services | ConstellationTV Episode 130

Episode 130 of Constellation TV covers a lot of ground. Hosted by Liz Miller, VP and Principal Analyst at Constellation Research, this one moves fast and pulls no punches. Here's what we covered.


Tokenmaxxing: Right or Wrong?

Liz opened the debate with a term she made clear she does not enjoy, and invited Holger Mueller and Mike Ni to weigh in.

Holger framed it as a potential democratization of business automation. For the first time, individual employees can experiment with AI without filing a change request or waiting on IT. That's new, and it matters.

Mike's take centered on the hero. The employees who go deep and push the limits of what AI can do are the ones who create the cultural shift that eventually brings the rest of the organization along. Token usage as a metric is blunt, but unleashing the right people isn't.

Liz pushed back on both. The problem isn't experimentation. It's when maxing becomes the measure of success. Usage without purpose isn't a strategy, and organizations that treat it like one will end up farther behind, not further ahead. The right measure isn't how much. It's what changed because of it.


Constellation ShortList: Digital Asset Management

DAM doesn't get the attention it deserves. Liz made the case that digital asset management is the last mile of experience delivery and the first technology that actually brings experience teams together in a way that works.

She walked through the three maturity stages: brand assurance, where it's about storage and findability; brand security, where controls, versioning, and metadata come in; and brand safety, where AI becomes the autonomous force keeping assets usable, rights-compliant, and built for delivery at scale.

Smartsheet's Brandfolder stood out on the shortlist for its seamless integration with work management, its clean UI, and its ability to serve both power users and occasional visitors without making either group feel like they're climbing a hill just to find a logo. If you're still treating your DAM like a big bucket of folders, it's time to rethink it.


The AI Problem PSOs Keep Getting Wrong

R "Ray" Wang sat down with Robert Cesafsky, COO of Certinia, off the back of his recent HBR piece, and the conversation cuts to the heart of why so many AI deployments in professional services are underperforming.

Most PSOs are putting their AI investment into service delivery. Client-facing work. Research, content, project execution. That makes sense on the surface. But the services management side, estimation, quoting, resource management, billing, revenue recognition, is being almost entirely ignored. And it requires a fundamentally different approach.

Service delivery can tolerate probabilistic AI. Services management cannot. When you're doing ASC 606 revenue recognition, you need deterministic AI. Rules-bound, auditable, traceable. The mistake PSOs keep making is collapsing both sides into one strategy and wondering why it isn't working.

The other insight worth sitting with: where you insert the human in the loop is more important than the automation itself. Expertise is becoming a commodity. Experience is not. We are the last generation of managers to only manage humans. The organizations that build their AI architecture around that reality will be the ones that win.


Buzzword Bingo with Larry Dignan

Liz wrapped the episode by lobbing the worst buzzwords in enterprise tech at Larry Dignan to get his unfiltered reaction. Automagical. Agentrification. Customer obsessed. IMHO. And of course, tokenmaxxing.

Larry's take on token maxing: nothing is more painful than a 60-year-old CEO saying maxing. It sounds absurd, it proves nothing, and a donkey can eat a lot of hay and still not win the Kentucky Derby. If your barometer for AI success is how many tokens you burned, you are measuring the wrong thing.

Watch the full episode and subscribe to Constellation Research YouTube for Episode 131, hosted by Martin Schneider, in two weeks.

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Project Management vs. Project Delivery: Why the Difference Finally Matters

Project Management vs. Project Delivery: Why the Difference Finally Matters

The age of AI has created an unprecedented opportunity for professional services organizations to transform how they work. Yet most PSOs are making a critical mistake in how they deploy AI, and it's costing them the exponential gains they're chasing.

R "Ray' Wang recently sat down with Robert Cesafsky, COO of Certinia, who just published a sharp piece in Harvard Business Review on exactly this problem. PSOs are solving the wrong AI problem, and until they fix the framing, no amount of investment will get them to the outcomes they want.

The Two Sides of Every Services Business

Every professional services organization runs two fundamentally different businesses under one roof.

The first is service delivery. This is the client-facing work. Research, content synthesis, content creation, unstructured data management, and project execution. This is where most AI investment is going today, and understandably so. Large language models are genuinely powerful here, and the ROI is visible.

The second is services management. Estimation, quoting, resource management, project financial management, forecasting, billing, and revenue recognition. This is the business of running the business. And this side is being almost entirely ignored.

Probabilistic vs. Deterministic: The Distinction That Changes Everything

Here is the core of Robert's framework, and it matters enormously.

Services delivery can tolerate probabilistic AI. Outputs vary. Creativity is welcome. Some hallucination risk is manageable when a human is reviewing the work.

Services management cannot work that way. Full stop.

Try running ASC 606 revenue recognition on a probabilistic model. Try invoicing a client or reallocating resources across a project portfolio without auditability. It does not work. These workflows require rules, enterprise context, and a clear record of exactly what the AI did, when, and why.

The mistake PSOs keep making is collapsing both sides into one AI strategy. They deploy an LLM across the enterprise and expect it to handle delivery and management equally well. The outputs look plausible right up until they create a compliance problem or a billing error that nobody can explain.

The right architectural move is to harness probabilistic AI within a deterministic, rules-bound, auditable framework for anything that touches service management. That is the approach Certinia is taking with its Veda platform, and it is the right instinct.

The Convergence Is Already Underway

Here is where the urgency compounds. The line between service delivery and service management is disappearing fast.

Think about what an end-to-end services workflow looks like in the AI era. A client conversation happens. Unstructured data. That conversation should flow directly into a statement of work, a services estimate, a staffed project with both human and digital workers, and ultimately into billing and revenue recognition in real time. Delivery informs management. Management informs delivery. The feedback loop is continuous.

Organizations that have built these two sides as separate AI strategies will never close that loop. They will never reach the autonomous enterprise. They will have two half-built systems producing noise while their competitors are compressing project timelines from months to weeks.

Where You Put the Human Is the Whole Game

As AI compresses decision timelines, the human is in the critical path of almost every significant outcome. That means more decisions, faster, with less time to deliberate. And it means that knowing exactly where to insert human judgment in the workflow is more important than the automation itself.

Expertise is becoming a commodity. Experience is not.

We are the last generation of managers to only manage humans. The leaders coming up behind us will manage mixed teams of human and digital workers as a matter of course. Services firms that build their AI architecture around that reality, pairing human ingenuity with the scale of digital labor, will be the ones to achieve 10x, 100x, and even 1000x gains.

The ones that don't will find themselves on the wrong side of two S-curves at once.


The Bottom Line

PSOs need to get three things right to compete in the AI era.

  1. First, recognize that service delivery and service management require fundamentally different AI approaches. Probabilistic for delivery. Deterministic and auditable for management.
  2. Second, stop treating AI as a single strategy across the whole business. Break it apart. Solve for each side correctly before trying to connect them.
  3. Third, connect them. The autonomous enterprise is only possible when delivery and management are in lockstep, sharing data, informing each other, and closing the loop in real time.

Read Robert's HBR piece. It came out on May 5. Then look hard at where your AI investment is actually going and ask whether you are solving the right problem. Most organizations are not. Yet.

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How Conversational AI is Transforming Db2 Management

How Conversational AI is Transforming Db2 Management

Constellation Research VP & Principal Analyst Holger Mueller sat down with Miran Badzak, IBM's executive director of databases, at IBM Think for a timely conversation very relevant to enterprise computing. IBM is making a serious move in the database management space with Genius Hub, a new AI-powered product built specifically for Db2 DBAs, and the timing could not be more relevant.


What Is Genius Hub?

Genius Hub is a conversational AI interface designed to help database administrators manage large fleets of Db2 databases, whether they run on-premises, in the cloud, or across hybrid environments. At its core, it handles the undifferentiated work that consumes DBA time: patches, updates, maintenance, tablespace management, anomaly detection, and more.

Think of it as a hyper-specialized assistant that knows your specific version and distribution of Db2, has access to your telemetry data, and can walk you through issues in plain language.

From Recommendations to Actions

Earlier this year, Genius Hub launched with AI-powered recommendations. You flag an issue, the AI tells you what it thinks you should do, and you decide whether to act. That was already useful.

What IBM announced at Think takes it a step further. Genius Hub can now take actions on your behalf. You review the proposed steps, approve, and the agent executes. It is a meaningful leap from advisory to agentic, and IBM has been deliberate about keeping humans in the loop throughout.

As Miran put it, the AI won't delete your database. That may sound like a low bar, but in mission-critical environments running banking applications and complex enterprise workloads, it matters more than it sounds.

Flexible Inferencing, On Prem or Cloud

One thing worth noting for enterprise buyers is the flexibility in inferencing. Genius Hub supports cloud-based inferencing across IBM Cloud, AWS Bedrock, Microsoft AI Foundry, and Google Vertex. It also supports fully air-gapped on-premises deployments running on AMD Instinct and, newly announced, Intel Gaudi chips.

For heavily regulated industries where data cannot leave the building, that on-prem optionality is not a nice-to-have. It is a requirement.

MCP Support Opens Up Integration

IBM also announced this week that it will support MCP servers for Genius Hub. This means Db2 management can now be integrated into broader fleet management workflows and tooling. The example Miran gave was instructive: with a single command, you could turn off all SAP instances running on Db2 across your environment. That kind of cross-system orchestration is where agentic AI starts to show its real enterprise value.


Getting Started

A free trial is available at ibm.com/db2. The install takes a few minutes, you connect it to the databases you want to manage, and you're running. No need to bring your own inferencing infrastructure. Genius Hub is also included in the new AI editions of Db2 for existing customers upgrading.

Bottom Line

IBM is moving with real urgency here, shipping updates multiple times a month and rapidly expanding capabilities. Genius Hub is not a bolt-on feature. It is a purpose-built AI layer for one of enterprise computing's most foundational workloads. Worth watching closely.

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AI Won't Kill HR - It Will Finally Free It | Holger Mueller on the Future of Work

AI Won't Kill HR - It Will Finally Free It | Holger Mueller on the Future of Work

In episode 21 of the Humanscope podcast, Holger Mueller, Vice President and Principal Analyst, Constellation Research gives us a front-row view of how AI is reshaping HR, enterprise software, and the future of leadership.

The topics cover:

  • Why HR will be transformed by AI faster than any other function
  • The "talent depth chart" concept - managing people like sports teams
  • Build vs. buy in the AI era - and why the bar to build has never been lower
  • Best-of-breed vs. suite - and why suites always win in the long run
    OpenClaw, agentic networks, and what "AI riding AI" means for enterprises
  • The leaders organizations need for 2030 - and what boards are getting wrong
  • Bold predictions: what the world of work looks like by 2030

Whether you're a CHRO, CTO, or people leader, this conversation will challenge how you think about technology, talent, and transformation.

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The Human Edge in an Age of Agentic AI | DisrupTV Ep. 439

The Human Edge in an Age of Agentic AI | DisrupTV Ep. 439

Insights from DisrupTV Episode 439 with Vint Cerf, Dr. David Bray, and Cheryl Strauss Einhorn

DisrupTV Episode 439 brought together some of the most influential voices shaping the future of the internet and artificial intelligence: Vint Cerf, often referred to as one of the fathers of the internet; Dr. David Bray, distinguished Chair of the Accelerator, Stimson Center & Principal/CEO, LDA Ventures Inc; and Cheryl Strauss Einhorn, founder of Decisive and author of The Human Edge: Smarter Decisions in the Age of AI. Joined by hosts Vala Afshar and R “Ray” Wang, the conversation explored one of the defining leadership questions of this decade:

What does it mean to lead — and remain deeply human — in a world where intelligence is no longer exclusively ours?

Across topics ranging from autonomous agents and synthetic media to decision science, governance, and the future of work, one message became increasingly clear: organizations that thrive in the age of AI will be those that combine technological acceleration with stronger human judgment, accountability, and critical thinking.

From Deterministic Systems to Probabilistic Agents

R "Ray" Wang opened the discussion by asking Vint Cerf how the concept of intent changes as we move from deterministic software systems to probabilistic AI models.

In the early days of the internet, systems automated communication and networking, but humans still owned the intent behind the actions. Agentic AI changes that dynamic. Increasingly, systems can reason, make decisions, and take actions autonomously — often without direct human supervision.

Cerf emphasized that this transition creates two urgent requirements.

Precise Languages for Agents

Humans misunderstand each other constantly. When AI agents communicate using loosely structured natural language, those misunderstandings can scale rapidly.

Cerf argued that agent-to-agent communication will require more precise, task-oriented languages capable of:

  • Clearly defining requested actions
  • Confirming what actions were completed
  • Reducing ambiguity in automated workflows
  • Supporting reliable verification and accountability

As agents begin operating “at the speed of money,” precision becomes essential.

Auditability and Accountability

If agents are acting on behalf of organizations, there must be a way to reconstruct:

  • What decisions were made
  • Under whose authority those decisions occurred
  • What data or instructions influenced the outcome

Cerf stressed the need for cryptographically verifiable audit trails capable of serving as evidence if systems fail, cause harm, or behave unexpectedly.

In short, if AI agents are going to act independently, organizations must know exactly who they represent and why they acted.

Governance Is Lagging Behind the Technology

Dr. David Bray offered a powerful metaphor for today’s AI environment.

He compared the current moment to city streets in the early 1900s, when horses, automobiles, pedestrians, and trolleys all shared the same roads before stoplights, lanes, and traffic laws existed.

That’s where organizations are today with AI agents.

Humans and autonomous systems are now operating together in the same digital workplace, but governance structures have not caught up.

“Whose Flag Is This Agent Flying?”

Bray emphasized that organizations cannot abdicate responsibility to AI systems.

Even if an agent acts autonomously, accountability still belongs to the organization deploying it.

This creates several leadership imperatives:

  • Clear governance frameworks for AI behavior
  • Human escalation paths when things go wrong
  • Meaningful recourse mechanisms for customers and employees
  • Defined ownership over agent decisions and outputs

As Bray framed it:

“Whose flag is this agent flying?”

If an AI system acts improperly, organizations will still be held accountable.

Cerf added that we still don’t fully understand what incentive structures for AI agents should look like. Humans respond to compensation, recognition, and consequences. Designing comparable behavioral systems for autonomous agents remains largely unexplored territory.

The Rise of Digital Labor

Vala Afshar brought the discussion into practical enterprise reality.

At Salesforce, millions of support interactions are now resolved without humans directly involved. Tens of thousands of employees use AI agents daily.

This signals a fundamental shift:

Organizations are no longer simply providing software tools to human workers.

They are increasingly deploying digital labor alongside human labor.

The relationship between people and technology is evolving from:

Human + software tool

to:

Human + digital colleague

Cerf warned that because AI systems are trained on human discourse, they naturally sound human. They use conversational language, express simulated empathy, and appear socially aware.

That creates a dangerous psychological trap.

People begin assuming these systems:

  • Truly understand them
  • Share human incentives
  • Possess judgment or morality
  • Care about outcomes

They do not.

Organizations that anthropomorphize AI too aggressively risk overestimating what these systems actually understand.

Misinformation at Machine Speed

The conversation then turned toward one of the most pressing consequences of agentic AI: synthetic information.

R "Ray" Wang noted that the internet democratized information while simultaneously accelerating misinformation. AI compounds this problem dramatically.

Cerf and Bray suggested that by the end of the decade, a substantial percentage of online information may be AI-generated.

This creates profound implications for:

  • Enterprise decision-making
  • Financial forecasting
  • Political systems
  • Brand trust
  • Public discourse
Critical Thinking Becomes a Survival Skill

Cerf argued that critical thinking is becoming one of the most valuable skills in the AI era.

Future leaders will need to:

  • Triangulate information across multiple sources
  • Compare outputs from different AI systems
  • Evaluate confidence levels and evidence
  • Use AI systems to critique other AI systems

Ironically, the same technology flooding the world with synthetic content may also become essential for filtering and validating that content.

Organizations may increasingly rely on AI-powered “decision intelligence” layers designed to distinguish credible signals from noise.

Autonomous Vehicles and Synthetic Data

The discussion also explored Waymo as a real-world example of agentic AI at scale.

Waymo combines billions of synthetic training miles with millions of real-world driving miles to train autonomous systems capable of handling edge-case scenarios.

Synthetic data allows organizations to safely model dangerous or rare events that would be impossible to recreate consistently in real life.

Examples include:

  • Children unexpectedly entering roadways
  • Weather anomalies
  • Complex traffic interactions
  • Emergency scenarios

The societal implications are enormous.

Autonomous systems could dramatically reshape:

  • Transportation industries
  • Rideshare and logistics workforces
  • Accessibility for disabled or elderly populations
  • Urban planning and mobility

Cerf described these systems as a “new set of workers” — digital entities capable of operating continuously, scaling rapidly, and extending human capability into environments humans cannot safely or efficiently manage.

Avoiding a Digital Dark Age

R "Ray" Wang revisited one of Cerf’s longstanding concerns: the possibility of a future digital dark age.

Historically, knowledge survived through durable physical mediums like books, tablets, and paper.

Digital information is fundamentally different.

Data is meaningless without the software, formats, and computing environments needed to interpret it.

Cerf explained that preserving digital history requires preserving not only the data itself, but also:

  • File formats
  • Software dependencies
  • Operating environments
  • Protocols and rendering systems

As AI systems generate exponentially larger volumes of logs, records, and audit trails, organizations face difficult questions around:

  • What information to preserve
  • How long to retain it
  • How to store it efficiently
  • How to maintain long-term interpretability

Without careful design, organizations risk losing reliable records precisely when more and more decision-making becomes automated.

AI in the Group, Not Just Humans in the Loop

David Bray proposed a useful reframing for how organizations should think about AI collaboration.

Instead of focusing solely on “human-in-the-loop” systems, he suggested thinking in terms of “AI in the group.”

In this model:

  • Humans and AI agents operate collectively
  • Each participant contributes different strengths
  • AI may serve as both participant and observer

Bray described scenarios where AI systems could observe organizational behavior and identify:

  • Poor delegation patterns
  • Skill mismatches
  • Employee overload
  • Communication gaps
  • Workflow bottlenecks

Done responsibly, AI could improve organizational performance by surfacing invisible dynamics humans often miss.

But once again, governance and accountability remain central.

Organizations must still define:

  • Who owns the system
  • How recommendations are validated
  • What recourse exists when systems are wrong or biased

Cheryl Strauss Einhorn and the Human Edge

The second half of the episode shifted from infrastructure and governance toward human judgment and decision-making.

Cheryl Strauss Einhorn introduced the core thesis behind her book The Human Edge: Smarter Decisions in the Age of AI:

AI doesn’t know you, and it doesn’t care about consequences. You do.

This distinction matters enormously.

AI can generate answers, options, and patterns, but it cannot inherently understand:

  • Your values
  • Your motivations
  • Your risk tolerance
  • Your emotional context
  • The long-term consequences of decisions

That responsibility remains human.

Your “Special Sauce” for Decisions

Einhorn explained that individuals approach decisions differently based on:

  • Core values
  • Preferred data types
  • Bias patterns
  • Stakeholder considerations
  • Tolerance for ambiguity

Two people facing the exact same situation may optimize for entirely different outcomes.

If AI systems do not understand that context.

Key Takeaways

  • Agentic AI represents a major shift from deterministic software to autonomous systems that can reason, decide, and act with minimal human involvement.
  • Governance frameworks are lagging behind the rapid deployment of AI agents, creating urgent needs around accountability, auditability, and oversight.
  • Human + agent collaboration is quickly becoming the new enterprise operating model, with organizations increasingly relying on digital labor alongside human workers.
  • Synthetic media and AI-generated misinformation will dramatically increase the importance of critical thinking, source validation, and decision intelligence.
  • AI should augment human judgment, not replace it. The organizations that win will combine AI acceleration with stronger human reasoning and governance.
  • Leadership in the AI era will require better questioning, better workflows, and clearer accountability structures across humans and machines.
  • Organizations must rethink how they redesign workflows, reskill employees, redeploy talent, and restructure management models for a world increasingly powered by agents.

Final Thoughts

DisrupTV Episode 439 underscored that the age of agentic AI is far bigger than another software cycle. It is fundamentally reshaping how organizations operate, how decisions are made, and how humans interact with intelligence itself.

AI systems are already transforming workflows, automating decisions, and scaling capabilities far beyond what humans alone can manage. But throughout the conversation, one theme consistently emerged: the enduring competitive advantage will not come from artificial intelligence alone.

It will come from organizations that strengthen human judgment alongside machine intelligence.

The future belongs to leaders who can:

  • Build accountable human + AI systems
  • Preserve critical thinking in a world flooded with synthetic information
  • Create governance models that keep pace with autonomous systems
  • Design workflows where humans and agents complement one another
  • Stay grounded in values, ethics, and purposeful leadership

As Cheryl Strauss Einhorn emphasized, AI may generate answers, but humans still define what matters.

In the age of agentic AI, the real human edge is wisdom, accountability, curiosity, and the ability to ask better questions.

Related Episodes

If you found Episode 439 valuable, here are a few others that align in theme or extend similar conversations:

Future of Work AI Chief Executive Officer Chief Technology Officer Chief AI Officer Chief Experience Officer

From “activation energy” and agent orchestration to donkeycorns and relationship capital, DisrupTV 425 explains what actually separates AI hype from real business impact.

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Why Brandfolder By Smartsheet Makes DAM “The Last Mile” of Digital Experience

Why Brandfolder By Smartsheet Makes DAM “The Last Mile” of Digital Experience

Digital Asset Management (DAM) is more than a place to dump logos and campaign files; it’s the last mile of digital experience delivery. In this ShortList Spotlight, Liz Miller, VP & Principal Analyst at Constellation Research, breaks down how organizations mature their DAM strategy across three big ideas:

Brand Assurance: Centralizing assets for consistency
  • One source of truth for logos, images, videos, presentations, and more
  • Version control, governance, and search to eliminate outdated or duplicate assets
Brand Security: Controlling usage, structure, and access
  • Rich metadata, selective versioning, and auto‑tagging
  • Smarter archival strategies and cold storage
  • Clear controls over users, rights, and applications
Brand Safety: Rights, readiness, and real experience delivery
  • Ensuring assets are actually usable and legally compliant today
  • AI-driven metadata and analytics for better utilization and performance
  • DAM is tightly connected to customer experience and business outcomes

Liz then dives into why Brandfolder by Smartsheet stands out on Constellation’s DAM ShortList:

  • Extremely intuitive and fast to set up
  • Strong AI capabilities, including advanced search and speech recognition
  • Powerful derivative creation, archival capabilities, and metadata management
  • Deep integration with Smartsheet’s intelligent work management, bringing assets, projects, approvals, and workflows together in one place

When DAM is integrated into how work actually gets done—not just where files are stored—it becomes a strategic engine for digital experiences across marketing, product, sales, and service.


If you’re evaluating DAM, don’t just ask, “Where do we store our assets?” Ask, “How does this become the last mile of our digital experience strategy?”

See the Constellation ShortList for DAM for DX leading solutions

Marketing Transformation Tech Optimization Next-Generation Customer Experience Digital Transformation Marketing Chief Marketing Officer On ShortList Spotlights

What Do You Really Stand For in the Age of AI? | DisrupTV Ep. 438

What Do You Really Stand For in the Age of AI? | DisrupTV Ep. 438

Values, Organizational Truth, and the Context Layer — Insights from DisrupTV Episode 438

In DisrupTV Episode 438, Vala Afshar and R “Ray” Wang sat down with Paul Ingram and Jon Reed for a conversation that connected two ideas rarely discussed together:

  • Personal values as a source of leadership clarity
  • Organizational context as the missing layer in enterprise AI

Together, they explored how the future of AI may depend less on raw model capability and more on whether organizations truly understand what they stand for—and whether their systems reflect a shared version of reality.

The throughline was unmistakable:

In a world increasingly shaped by AI, clarity becomes leverage.

Values Are More Than Ethics — They’re Operating Systems

Paul Ingram’s work begins with a deceptively simple question:

What do you really stand for?

His argument is that values are not just abstract ideals or culture-deck slogans. They are practical decision-making tools that shape how leaders behave under pressure.

He illustrated this with the story of Captain Matt Feely during the 2011 Great East Japan Earthquake. Faced with a decision that technically violated protocol but aligned deeply with his values of humanity, service, and love, Feely chose to continue humanitarian aid operations.

Why?

Because he had already clarified what mattered most.

According to Paul, this is the hidden power of values:

  • They reduce ambiguity in high-stakes moments
  • They improve resilience and focus
  • They help leaders make faster, more principled decisions

Most people, however, have never fully articulated their values in a structured way. They may know fragments of what matters to them, but not enough to consistently guide action.

The “Triad” Exercise: Surfacing Hidden Drivers

One of the most fascinating moments in the episode came when Paul guided Ray Wang through a live values exercise.

Starting with something simple—favorite cities—the conversation gradually uncovered deeper motivations:

  • Liveliness
  • Serenity
  • Precision
  • Velocity
  • Purpose
  • Helping people

What looked like a casual preference discussion ultimately revealed a core operating philosophy.

Paul’s broader point is that values are often hidden beneath surface-level preferences and habits. The work of leadership is uncovering and prioritizing them intentionally.

He recommends maintaining a manageable set of core values—often around five to eight—that are:

  • Prioritized
  • Memorable
  • Actionable

Because when values become explicit, they stop being passive beliefs and start becoming behavioral tools.

The Missing Layer in Enterprise AI: Context

If Paul Ingram focused on the inner operating system of leaders, Jon Reed focused on the outer operating system of organizations.

His thesis is blunt:

Most AI projects fail not because the models are weak, but because the organizational context is broken.

Jon describes this as the missing “context layer.”

This layer includes:

  • Shared definitions and metrics
  • Agreed-upon workflows
  • Institutional knowledge
  • Governance rules
  • Process exceptions
  • Business semantics
  • Organizational trust

Without that foundation, AI systems are often amplifying confusion rather than intelligence.

As Jon puts it, organizations frequently attempt to automate environments where teams still disagree on:

  • What the data means
  • Which numbers are correct
  • How processes actually work
  • What success looks like

AI doesn’t solve those problems. It exposes them.

The Hidden Cost of Enterprise Dysfunction: The “Verification Tax”

One of Jon’s strongest observations was around what he calls the verification tax.

In many enterprises, professionals spend massive amounts of time:

  • Validating data
  • Reconciling systems
  • Checking spreadsheets
  • Confirming metrics across departments

In some cases, leaders estimated that 30–70% of professional work time is spent simply verifying whether information can be trusted before decisions are made.

That creates a profound AI problem. Because if trust in organizational data is already weak among humans, AI systems trained on that same environment inherit the dysfunction.

This reframes AI readiness entirely:

AI readiness is not primarily a model problem.
It’s a trust, governance, and organizational alignment problem.

Why LLMs Alone Won’t Solve Enterprise Complexity

Jon Reed was careful to distinguish between being anti-AI and anti-hype.

He acknowledged the enormous strengths of large language models:

  • Pattern recognition at scale
  • Natural language interfaces
  • Workflow decomposition
  • Massive productivity acceleration

But he also outlined their limitations in enterprise environments:

  • Lack of persistent organizational memory
  • Weak understanding of chronology and causality
  • Limited governance awareness
  • No inherent understanding of real-world context
  • Inability to autonomously seek missing information

His conclusion: LLMs are powerful, but incomplete.

To create meaningful enterprise outcomes, organizations need compound systems that combine:

  • LLMs
  • Deterministic workflows
  • APIs
  • Databases
  • Domain-specific models
  • Human oversight

Most importantly, they need reliable context.

AI Is Amplification Technology

One of the most important insights from the episode was that AI amplifies whatever already exists inside an organization.

That means:

  • Strong values become stronger
  • Clear systems become more efficient
  • Broken trust becomes more visible
  • Organizational confusion scales faster

R "Ray" Wang framed this pragmatically through risk and accuracy:

  • 85% accuracy in customer support may be acceptable
  • 85% in finance or healthcare may be catastrophic

The lesson is not that AI must be perfect before deployment. It’s that leaders must design systems thoughtfully around risk, observability, and human checkpoints.

Beyond Automation: AI and Human Creativity

Both Paul and Jon ultimately converged on a hopeful view of AI.

Paul argued that creativity has always been about selecting meaningful combinations from infinite possibilities. AI expands the space of possibilities dramatically—but humans still determine what matters.

AI can generate ideas.

Humans decide:

  • Which ideas align with mission and values
  • Which outcomes are ethical and sustainable
  • Which paths are worth pursuing

That’s where human agency remains essential.

Jon echoed this sentiment by warning against “AI for AI’s sake.” The real opportunity is not simply automating legacy workflows faster—it’s redesigning how organizations create value altogether.

Key Takeaways

  • Values are not soft concepts; they are practical leadership tools
  • Organizations with clear internal alignment will outperform those with fragmented truth systems
  • The “context layer” may become the most important layer in enterprise AI
  • AI readiness is fundamentally a trust and data quality challenge
  • LLMs alone are insufficient without governance, workflows, and human judgment
  • AI amplifies organizational strengths and weaknesses alike
  • The future belongs to organizations that combine human creativity with contextual intelligence

Final Thoughts

DisrupTV Episode 438 offered a powerful reminder that AI is not replacing leadership—it’s exposing it.

The organizations that thrive won’t simply have the best models. They’ll have:

  • The clearest values
  • The strongest trust systems
  • The most aligned organizational context
  • The best human judgment surrounding the technology

In many ways, AI acts like a mirror.

If leaders lack clarity about what they stand for, AI magnifies confusion.
If organizations lack a shared version of truth, AI accelerates dysfunction.

But when values and context are strong, AI becomes something far more powerful: A force multiplier for creativity, purpose, and better decision-making at scale.

Related Episodes

If you found Episode 438 valuable, here are a few others that align in theme or extend similar conversations:

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From “activation energy” and agent orchestration to donkeycorns and relationship capital, DisrupTV 425 explains what actually separates AI hype from real business impact.

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