As long as I can remember, the marketplace middleman was the go-to and the go-between in the marketplace, the alternative option, or, in common vernacular, a market discoverer. They were the ones who stood between you and the source — the buyer and the seller — and made a nice premium on their services, connecting the two who otherwise would remain in perpetual distance from one another. Intermediaries were hired for all kinds of services that benefited those with limited knowledge and time. For instance, AI-enabled platforms in retail, finance, distribution, and other market facilitation are seeing consumers shift their trust from the human middleman to AI. A scary war is underway between AI and middlemen.
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As we already know, no one person has all the knowledge. Still, intermediaries fill niche gaps and lower acquisition costs for consumers with missing information, or when information is too costly to obtain. AI and middlemen are at odds; why? Because AI makes it harder for market intermediaries to lower information costs for consumers. Question: How often do you use AI as the middleman? The war between middlemen and AI is ongoing.
While AI is advancing and not advancing in some respects, it is safe to say that consumers can close their knowledge gap using technologies that did not exist in the heyday of middlemen. For the most part, middlemen were effectively the bridge builders; they controlled the flow of information and put a premium on it; in that regard, they were the only resource, the only go-to once upon a time. But let’s face it: customers aren’t brand loyal to humans or AI systems. In other words, we are starting to pay and play with AI, not the human middleman.
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The problem is that go-betweens add premium costs to the buyer or information seeker because of the perceived value they add. Not that middlemen can be replaced, but AI is a serious contender — as it too is improving areas that might otherwise drive up consumers’ costs of doing business. What happens when human middlemen are effectively ousted from the marketplace? Will the market self-correct and eliminate the less preferred option — the human or AI?
The fact remains, consumers have moved on from the all-knowing middleman and put their trust in AI, for better or for worse, but practically speaking, it is a reality. In essence, the middleman is no longer the primary source of consumer information, drying up revenue streams for those who discover new markets; platforms and bots increasingly interact with human customers, which is what middlemen must compete with in today’s marketplace. AI as a new market intermediary may, in effect, dry up middleman dealers and the market space they once held. What happens when there are no more middlemen in our economy? Is that where things are going? This is why people fear AI: many claim it will take jobs and eliminate human work and prosperity. But the reality is that intermediaries see AI as the new middleman, and it’s a scary sight.
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