Is AI a risky black magic or a magical tool?

Is AI a mystical risk or a transformative tool for small businesses? Understand how you can harness AI to drive growth, enhance efficiency, and navigate the challenges of adopting this powerful technology.

Artificial Intelligence

By Govindaraju Periasamy, SmartX Technologies 

Many small business owners and CEOs view AI as a form of "black magic" – a mysterious technology that delivers results without transparency.

At our AI adoption workshops, we ask participants what they think about AI and invite them to share their ideas and opinions. They often highlight the transformative potential of AI and its impact on job opportunities, while also expressing concerns about security and trust. However, when we asked the same question to a group of Australian small business owners and CEOs, their responses were surprisingly different.


Many viewed AI as a form of "black magic" – a mysterious technology that delivers results without revealing how. One CEO remarked, "I don’t trust something I can’t understand. In business, I need to know exactly how decisions are made and where the information comes from. With AI, I’m worried it might steal my data and put my business at risk. I don’t consider it suitable for my business, nor do I have confidence in realising value from investing in AI tools."

When we asked this group if they had used ChatGPT or any AI tools, over 45% said they hadn’t. Only 5% said they were using a paid subscription to ChatGPT. This lack of awareness is one of the biggest challenges facing small businesses in AI adoption. The first step to overcoming this is educating business owners on what AI is and how it works.

To simplify things: ChatGPT is an example of a sophisticated Generative AI application, It’s built on a technology called Large Language Model (LLM), which has been trained on vast amounts of data to provide responses to user queries. Think of it as a big brain filled with knowledge from all the information available on the internet. However, this "brain" can be reset, wiped clean of public data, and retrained using only your private business data – what’s called a foundation model. This way, you can train GenAI foundation model to perform specific tasks, such as speaking German or learning electrical engineering, just like a person. Importantly, these AI solutions can be deployed in your private network, keeping your data secure, just like your Microsoft Office applications. With the right knowledge and approach, GenAI foundation model can be a powerful tool for small businesses, helping them improve efficiency, cut costs, and drive growth. The key is to start small and find AI applications that suit your business needs.

Common challenges

A common challenge among business leaders is determining which AI solution fits their needs best. Should you subscribe to a SaaS application, buy an off-the-shelf solution, or build a custom one? The options seem endless, from chatbots for customer service to single-use AI tools like transcription or content creation software. At SmartX, we guide small businesses through these questions and help craft a tailored AI adoption strategy.

The focus shouldn’t be on the technology itself but on the financial impact on your business. Start by analysing your business's revenue and operational costs. How can AI help reduce costs or increase revenue? This is what we call Business Impact Value. The benefits of AI may include tangible cash flow improvements or intangible advantages like a better customer experience.


For instance, AI can level the playing field in e-commerce—small businesses delivering superior user experiences that combine online and in-store experiences can compete with major brands. A successful AI strategy focuses on maximising business impact by increasing revenue, cutting costs, and enhancing customer satisfaction. By quantifying these factors, you can make informed decisions on whether to adopt a single-use SaaS application like a CRM or integrate AI into enterprise applications like Microsoft Copilot.

Finally, a significant challenge for small businesses is attracting, training, and retaining talent – particularly for roles involving repetitive tasks. AI can automate these processes, reduce turnover, and boost employee satisfaction.

As the next generation of workers grows up using mobile devices, AI, and chat apps, businesses that fail to provide a similar experience in the workplace risk falling behind. These companies may struggle to attract and retain talent, especially as employees increasingly expect seamless, technology-driven environments. Businesses that fail to integrate AI risk falling behind in both competitiveness and talent retention. AI is not black magic – it is data-driven science. With the right partnership, small businesses can create magic with innovative AI applications.


Govindaraju Periasamy is co-founder of SmartX Technologies Australia  an upstart AI solutions company that helps businesses innovate and automate workflows through AI adoption. Our approach begins with an AI Adoption Workshop, where we educate stakeholders, validate business use cases through Proof of Concept (PoC), and drive value realisation by implementing and operationalising AI tools. For more information, visit our website or email us at info@smartxtechnologies.com.au.