Making Smarter Bets: Towards a Winning AI Strategy with Probabilistic Thinking

Probabilistic thinking and expected value analysis can help create a more effective AI strategy. This approach aids in identifying and selecting AI opportunities by applying investment analysis tools like ROIC and real options. It also provides a framework for AI product portfolio management using concepts from Modern Portfolio Theory to balance risk and return. Furthermore, a quantitative mindset helps counter behavioral biases, such as herd mentality and loss aversion, which can lead to poor decision-making amid industry hype.