How AI is changing Business Models

AI’s Transformative Power: Navigating Hype and Reality in Business Models at Web Summit Lisbon 2025

AI is fundamentally transforming business models, a central topic at Web Summit Lisbon 2025. Uptin Saiidi moderated a panel with Mr. Ramprakash Ramamoorthy, Director of AI Research at Zoho Corporation, and Mr. Lars Gehrmann, Group Chief Digital & AI Officer at Qatar Insurance Group, discussing AI’s real-world impact and future trajectory across diverse industries.

Mr. Gehrmann highlighted AI’s pervasive role in the data-rich insurance sector, influencing client interactions, product development, and service delivery. He noted the challenge of effective implementation amidst numerous opportunities, stressing the strategic importance of leveraging proprietary data. Mr. Ramamoorthy cautioned against AI hype, stating actual productivity gains are typically 10-15%, not 2x or 10x, emphasizing that successful AI adoption requires robust digital maturity, including well-defined processes and integrated data infrastructure.

Generative AI, Mr. Gehrmann explained, enables faster product conceptualization, though regulatory approvals still cause delays. He observed a significant increase in employee enthusiasm for AI, drawing parallels to the internet’s early transformative period, with staff eager to explore new applications. Mr. Ramamoorthy provided examples from Zoho: AI in IT management (ManageEngine) detects unusual user behaviors 15% earlier, reducing downtime and boosting agent efficiency. An Indian auto garage used unified systems to give chat agents instant access to customer and vehicle history, streamlining service.

Regarding automation, Mr. Ramamoorthy stated AI excels at repetitive tasks, freeing human cognitive load. However, human empathy and diligence remain crucial for tactical decisions. AI deployment is most effective when its decisions align closely with human judgment, ideally with 85-90% accuracy, such as in credit decisions, ensuring responsible application. Mr. Gehrmann affirmed AI in insurance primarily augments human capabilities, freeing employees from mundane tasks to focus on new products and business models, fostering innovation rather than replacement.

Addressing job displacement, Mr. Ramamoorthy warned against “shadow AI” and the risks of employees using consumer AI tools with sensitive data. He noted that AI-related layoffs are often overstated, with productivity gains capped at 15%. A US payments company’s failed attempt to replace support staff with AI underscored the enduring need for human interaction and judgment, indicating that AI’s role is supportive, not fully substitutive.

For startups, Mr. Gehrmann advised securing data access, as it’s paramount for AI success. He urged founders to fully embed AI into all operations, building lean teams that leverage AI agents for scalability. Mr. Ramamoorthy added that startups should prioritize solving genuine customer problems, not just adopting AI for trendiness, emphasizing seamless integration into software to address real user needs and deliver practical, impactful solutions.