BUSINESS & TECHNOLOGY — The enormous amount of money flowing into artificial intelligence is likely to trigger a new wave of innovation, but businesses and societies must be willing to tolerate failure if they want entrepreneurs to take the risks necessary to create new products and companies, according to PwC global chairman Mohamed Kande.

Kande said the scale of investment in AI is already large enough to create an entirely new generation of businesses, even though not every company or project receiving funding will succeed.

Speaking to The Straits Times in Singapore, Kande argued that the biggest breakthroughs could emerge from environments where people are allowed to experiment, fail and try again.

AI Investment Is Creating a New Innovation Cycle

The rapid growth of AI investment has created enormous expectations around the technology.

Technology companies are spending heavily on computing infrastructure, data centres, chips and AI models, while businesses across other industries are looking for ways to use the technology to improve productivity and create new sources of revenue.

Kande believes this enormous flow of capital will inevitably produce new businesses and technologies, even if some investments fail.

His argument is that innovation rarely comes from a single successful attempt. More often, successful products emerge after companies experiment repeatedly, learn from mistakes and change direction.

Failure Is Part of Innovation

Kande said people often focus on successful companies while ignoring the many failed experiments that came before them.

For entrepreneurs, that creates an important lesson: failure does not necessarily mean that an idea was worthless.

Some of the world's most successful businesses were built after founders changed their original ideas, abandoned unsuccessful products or learned from mistakes.

Kande argued that societies need to create an environment where people can take those risks without being permanently punished for every unsuccessful attempt.

The United States Has an Advantage in Risk-Taking

When asked where entrepreneurs have the greatest opportunity to recover after failure, Kande pointed to the United States.

He said the country generally has a greater acceptance of risk-taking and entrepreneurship than many other markets.

That culture can make it easier for founders to start another company, attract investment and attempt a different idea after an earlier business fails.

For AI, that could become increasingly important as the technology moves from experimental research into practical applications across the economy.

AI Is Moving Beyond Chatbots

The AI economy is no longer limited to companies building large frontier models.

According to Kande, the next stage will increasingly involve applying existing AI models to real-world problems.

That could include AI systems operating factories, assisting drug discovery, improving hospitals, supporting customer service and helping businesses automate complex processes.

This shift could create opportunities for thousands of companies that do not need to build their own frontier AI models.

A New Generation of AI Companies Could Emerge

The largest technology companies have attracted much of the attention because they have the computing power and financial resources required to build advanced AI models.

But Kande believes the next generation of important AI businesses could look very different.

Many may use existing models and specialise in particular industries rather than trying to compete directly with the biggest AI laboratories.

A company could, for example, build an AI system specifically for manufacturing, healthcare, logistics or energy without developing a frontier model from scratch.

AI Could Create a New Wave of IPOs

Kande also expects the AI boom to eventually produce more companies capable of entering public markets.

He argued that the attention surrounding major anticipated listings can obscure the much larger number of smaller companies developing products and infrastructure throughout the AI ecosystem.

These companies could eventually raise capital through initial public offerings as they grow.

A healthy IPO market, however, depends on having an ecosystem where companies can be created, financed, tested and allowed to grow.

Is AI in a Bubble?

The enormous amount of capital flowing into AI has also raised concerns about whether the industry is becoming overheated.

Kande acknowledged that there is significant hype surrounding AI but said many companies serving the sector also have strong underlying businesses and are experiencing genuine demand.

Some major technology companies are spending enormous amounts on AI infrastructure, putting pressure on cash flow, but they are also generating substantial earnings.

The problem, he suggested, is that investor expectations can become so high that even strong financial results may appear disappointing.

A Future AI Crash Could Look Different

Kande does not predict that AI will cause the next global financial crisis.

However, he warned that the growing connections between AI and other industries could make a future economic shock more complicated.

The AI ecosystem now reaches into technology, semiconductors, energy, property, manufacturing and cooling infrastructure.

Unlike the financial crisis of two decades ago, which was heavily concentrated in financial services, an AI-related downturn could affect multiple industries in different ways.

That could make it harder to identify where a crisis begins and how far its effects might spread.

AI Is Becoming an Economic Ecosystem

The transformation is changing how businesses think about the technology.

AI was initially discussed largely as a tool for automating work and reducing costs.

Companies are increasingly asking a different question: how can AI help them create more value?

That means developing new products, improving operations, discovering new revenue streams and enabling employees to perform tasks that previously required larger teams.

The Problem With Replacing Junior Workers

AI could also create an unexpected challenge for businesses.

Many junior employees traditionally learn their professions by performing repetitive or routine tasks before gradually taking on more complicated responsibilities.

If AI performs too many of those basic tasks, younger workers could lose some of the practical experience that helps them develop into senior professionals.

Kande said there is currently no established solution to this problem.

Companies will have to experiment with new ways of training employees and accept that some approaches will not work.

PwC Is Treating AI as a Digital Colleague

At PwC, Kande said AI is being viewed as a “digital colleague” rather than simply a tool for eliminating jobs.

The technology can help employees complete work faster and more safely while taking over some repetitive activities.

This approach reflects a broader debate about how companies should introduce AI.

The question is not simply whether AI can perform a task. Businesses must also determine how humans will work alongside the technology and how employees will continue developing their skills.

The Real Advantage May Be the Willingness to Experiment

The companies that benefit most from AI may not necessarily be those that make the fewest mistakes.

They may instead be the organisations capable of running experiments quickly, identifying failures early and adapting before competitors.

That requires a culture where employees can test new ideas without fearing that every unsuccessful experiment will damage their careers.

For entrepreneurs, it also requires investors who understand that some failures are unavoidable when pursuing genuinely new ideas.

AI Investment Will Not Guarantee Success

There is an important distinction between investing heavily in AI and creating valuable AI businesses.

Money can provide computing power, talent and infrastructure, but it cannot guarantee that a product will solve a real problem.

Companies still need customers, strong management, useful technology and sustainable business models.

The AI boom will therefore produce winners and losers, just as previous technology waves did.

Our Perspective

The most interesting part of Kande's argument is not that AI investment will create innovation. That is increasingly obvious.

The harder question is whether businesses and societies are prepared to accept the failures required to discover that innovation.

If companies punish every failed experiment, employees will naturally avoid taking risks. The result may be an organisation that appears safe but gradually becomes less innovative.

The real advantage in the AI era may therefore belong to companies that can experiment aggressively while controlling the cost of failure. The goal is not to avoid failure completely, but to fail cheaply, learn quickly and keep moving.

Conclusion

PwC global chairman Mohamed Kande believes the huge investment flowing into artificial intelligence will create a new generation of businesses, technologies and potentially public companies.

But he argues that investment alone is not enough. Innovation requires people to experiment, take risks and sometimes fail without being permanently punished for unsuccessful attempts.

As AI spreads from frontier models into factories, hospitals, drug discovery, customer service and other industries, the opportunity could extend far beyond the handful of companies currently dominating the AI market.

The next AI winners may not simply be the companies with the biggest models or the most money. They could be the businesses most willing to experiment, learn from failure and turn rapidly changing technology into useful products for the real economy.

Daily Touch Insights Editorial Team
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