The AI Revolution: How Chicago Businesses Are Harnessing Technology for Growth

Artificial intelligence (AI) is proving to be a game changer for various businesses in Chicago, with companies like Kidsy at the forefront of this technological shift. Founded in September 2023, Kidsy is an online reseller offering discounted baby and children’s products, benefitting from AI tools that ensure competitive pricing by scouring the web. This technology not only helps in sourcing open-box items but also identifies potentially fraudulent transactions, optimizing operational efficiency from day one.

“As soon as we launched Kidsy … we saw that there were many gaps within the business that would be far more efficiently fulfilled by the use of artificial intelligence rather than any human labor,” says Shraysi Tandon, co-founder of Kidsy.

AI technology transforming business operations
With AI, Kidsy has successfully removed labor-intensive tasks through automation, enhancing customer experiences and reducing operational costs.

Tandon emphasizes the long-term benefits, explaining how the investment in AI has resulted in significant cost reductions while improving the speed of transaction fulfillment and customer service responsiveness. But she also acknowledges the challenges—particularly in a burgeoning field characterized by limited regulations and high implementation costs.

In the broader business landscape, AI had been anticipated to revolutionize work environments following its rise in popularity during 2022. However, adoption rates remain moderate, as revealed by a March report from the U.S. Census Bureau, indicating that AI’s usage climbed from 3.7% to 5.4% among U.S. businesses between September 2023 and February 2024.

Real-World Applications of AI in Different Industries

The restaurant industry is also taking notice, as exemplified by Farm Bar, co-owned by restaurateur TJ Callahan. This establishment implemented an AI phone answering service to improve customer engagement during periods when the staff was occupied.

“Once the guest is in the restaurant, sitting at the bar, AI has no rule,” Callahan remarks, expressing curiosity about future AI advancements in the service sector.

AI integrated into restaurant service models
With rising labor costs compounding challenges, business owners are looking to AI not only as a means of cutting costs but also as a resource for enhancing customer service and response times. The restaurant industry, while traditionally reliant on human interaction, is recognizing the potential for AI to support routine queries and tasks.

To mitigate risks often associated with AI, experts like Deming Chen from the University of Illinois Urbana-Champaign urge companies to balance innovation with caution. Development costs for tailored AI solutions can be steep and require careful integration into existing systems. This sentiment is echoed by Steve Banke from IT consulting firm Ntiva, who warns companies to thoroughly understand the technology before jumping on the AI bandwagon.

Innovating Beyond Expectations: Ludex’s AI Journey

Another inspiring story comes from Ludex, an innovative app developed for sports trading card identification. Co-founder Heather Denniston faced financial and developmental hurdles while creating AI capable of recognizing various trading cards. The resulting technology, while expensive, has led to significant user engagement, with more than 1.5 million downloads since its launch in 2022.

“It took about a year and about a million dollars for us to solve base cards, which are just the simple cards, the vintage cards…but financial limitations were our first roadblock,” Denniston shares.

The role of AI in sports collectibles
The progress made by Ludex illustrates how perseverance through innovation can ultimately lead to success. Their groundbreaking work is a testament to Chicago’s potential as a tech hub, emphasizing the need for support, particularly for female and minority founders.

The Ethical Side of AI Implementation

While AI presents novel opportunities for firms, ethical considerations are increasingly important. The Small Business and Entrepreneurship Council’s 2023 report highlighted that small businesses invest an average of $1,800 in AI annually, with a significant number planning to up their investments. However, there are pressing concerns regarding data privacy and the ethical implications of machine learning models.

Rita Garry, an AI and data privacy attorney, highlights the complexity surrounding data usage; companies need to navigate the legal landscape carefully, as misuse of AI could lead to employment discrimination if algorithms are biased.

“As long as we have a clear policy and standardized procedures with strong regulations, I feel the generative AI will help us instead of hurt us,” Garry asserts.

Data privacy and AI in business
State regulations are evolving rapidly, with more than 25 states looking into AI-related legislation. Illinois has been proactive in implementing restrictions on AI hiring practices, significantly shaping the landscape for responsible AI deployment.

Conclusion: Embracing AI with Caution

Chicago’s embrace of AI reflects a larger trend towards digital transformation. Businesses must weigh potential benefits against costs, both financial and ethical. The stories of Kidsy, Farm Bar, and Ludex showcase how innovative approaches and careful considerations can lead to success in leveraging AI. As firms navigate these unpredictable waters, a balanced approach, rooted in ethical considerations and savvy business practices, will ultimately dictate how effectively they harness this powerful tool.

With the rapid pace of technological advancement, the future looks bright for businesses willing to innovate thoughtfully—transforming the AI landscape in Chicago and beyond.

The future of AI in Chicago businesses