how does porter s five forces model apply to the ai sector 
using the model we would begin by looking at the competitive rivalry the ai sector is marked by high competition with key players ranging from tech giants to small startups rapid advances mean companies have to move quickly simply to maintain relevance we would then need to gauge the power of suppliers of data sets and specialized hardware which have ample power since ai firms rely heavily on these resources moving to consumers we would need to review the needs of individual consumers and whether larger companies can force ai firms to negotiate better services and prices for them the field of ai has been attracting many new entrants but there are significant barriers to entry including high initial research and development costs lastly the threat from the last force the possibility of substitutes depends on what a firm wants to do with its ai based technology the more complicated the tasks the ai is given the more likely other goods and services can t substitute for it the bottom lineporter s five forces model sets out essential criteria for considering a company s competitive landscape the power of suppliers and buyers the threat of new entrants and substitutes and competitive rivalry while the economic terrain has evolved significantly since the 1970s and porter has updated his work ever since the principles underlying porter s model remain current it s still the case that companies don t rise and fall on their portfolio of products alone but are jockeying with others in industries that have their own logic and structural forces at play today while the five forces model may require adapting it to rapid technological change and the importance of collaboration across many industries it s a reliable way to help guide companies needing to navigate industry specific challenges in their competitive strategy 