IDEAS / POST

The Business Strategy Buried in AI Consciousness Research

Noise is Only Part of The Problem

AI is a confusing space, it’s true.

You’ve no doubt heard about the MIT study citing 95% of businesses that aren’t seeing ROI from their AI investment. The study reveals most businesses are using AI for quick fixes and hacks, not ‘hard’ tasks like transforming high value, complex workflows. (Coles notes version: we think doing the easy stuff is enough, and we’re surprised when it isn’t).

Meanwhile, we’re surrounded by mythic tales of world-changing (and potentially economy-cratering) investment in the space – investments that drive our FOMO. From what I can gather, NVIDIA saved the market last week. Except, wait, it just dipped. Damn.

LinkedIn has pretty much been reduced to a Hatfields and McCoys shootout between “AI will take our jobs” and “AI will plus our jobs” pundits. It’s exhausting, and to paraphrase Jean-Paul Sartre, both positions are making me a little nauseous.

Truth is, the commons is being overrun with simple answers and shallow thinking. And simple answers don’t cut it (to wit, the MIT Study above).

Yesterday, I was lucky enough to hear a presentation that rewired how I think about this scenario. Dr. Loki Jörgenson – PhD in computational physics from McGill, 20+ years building ML startups from Vancouver to the Bay Area – delivered a talk titled “What AI Really Thinks: Emergence of Artificial Minds.”

It was brilliant, discomfiting, and occasionally over my head.

Jörgenson took us deep into things like language models, concept clustering, and embodied AI. I’m not going to delve into that – it’s not in my wheelhouse, and probably not useful to my audience.

But buried in the complexity was something I found reassuringly practical. Something that could actually help founders make better strategic decisions about AI.

It was the mirror test.

Testing for Business Self-awareness vs Industry Imitation

Jörgensen referenced the work of American psychologist Gordon Gallup when he explained how scientists are grappling with recognizing AI ‘consciousness’- a state where the machine ‘recognizes’ itself. According to Gallup’s groundbreaking 1970 work, consciousness could be determined in animals using a mirror test.

Initial Exposure: The subject is given access to a mirror to observe its reflection. Initially, many animals display social responses, as if the reflection is another individual.
Testing Behaviour: The subject moves past the social response phase and may engage in repetitive movements or physical inspections (e.g., looking behind the mirror) to test the correspondence between their movements and the reflection.
The Mark Test: A mark (e.g., odorless paint or a sticker) is secretly placed on a part of the subject’s body only visible via the mirror. In humans, this is often a red spot on the nose (the “rouge test”).
Observation: The subject’s reaction to the mark in the mirror is observed. If the subject touches or investigates the mark on its own body, it is interpreted as evidence that it recognizes the reflection as a representation of itself – a sign of conscious thought.

Upon reflection, this triggered an idea: could the mirror test also be a system (I love systems) for gauging business self-awareness vis a vis AI adoption?

Stage 1: initial Exposure “Mimicking industry patterns”

What it looks like: Your AI strategy looks and feels exactly like every other company’s. You aren’t conscious that there’s anything beyond what meets the eye.
The behavior: “We need AI features because everyone else has them”.
Strategic reality: Today, most businesses are stuck here – non-self-awareness dressed up as slick tactics.
The test: Are your AI decisions driven by what competitors do or what your unique position requires?

Stage 2: Testing Behaviour “Taking time to study interactions”

What it looks like: Moving past “me too” AI implementation to study what interactions actually happen between your unique customers and yourself.
The behavior: “Let’s look beyond tactical fixes. What are people doing when they interact with us? What are we missing? Can we learn something?”
Strategic reality: Many businesses devote time and energy to this. Many more skim the surface.
The test: Have you studied actual consumer behaviour around your product interaction, or just given it lip service?

Stage 3 and 4: The Mark Test and Self Recognition “Genuine strategic self-awareness”

What it looks like: Your strategy reflects deep understanding of your unique position, capabilities, market and customer psychology.
The behavior: Confident strategic decisions. You understand what the customer will do, because you know what the customer is thinking.
Strategic reality: Very few businesses achieve this level of strategic consciousness.
The test: Your strategic decisions wouldn’t fit any other business as well as they fit you.

While Others React, You Anticipate

All I’ve done above is create an analogy between reactive AI thinking vs strategic AI thinking. True, it doesn’t do justice to Jörgenson’s ideas, but it helps founders floundering in AI noise.

Reactive founders ask: “Is AI going to kill my business?”

Strategic founders ask: “What stage is my market in the AI adoption process, and how do I position accordingly?”

Reactive founders get paralyzed by uncertainty about AI advancements.

Strategic founders use market psychology frameworks to make confident bets about customer readiness.

Reactive founders either ignore AI completely or chase every AI trend.

Strategic founders understand that different AI approaches work for markets at different stages of business / customer ‘consciousness’.

The businesses that win during technological transitions aren’t the ones with the best crystal ball – they’re the ones who understand market psychology and position accordingly.

The Strategic Question to Ask Yourself

Loki’s presentation pushed my thinking in uncomfortable ways. It forced me to grapple with concepts I wasn’t prepared for. But, happily, that discomfort led to a bit of clarity about what founders actually need.

You don’t need a PhD in computational physics to think strategically about AI. You need frameworks that help you understand market psychology and how to position.

The strategic question is: “What stage is my market in the AI adoption process, and how do I build competitive advantage around that reality?”

If you’re a founder who wants to think strategically about AI – let’s talk.