Quiz: Module 1, Lesson 2 - The AI Stack: Mapping the New Power Dynamics

Instructions: Answer the following questions based on the lecture notes and reading summary for M1, L2.

Part 1: Multiple Choice

1. Which company is most representative of the "Hardware" layer of the AI Stack? a) OpenAI b) Google c) NVIDIA d) Microsoft

2. What is the most durable, defensible competitive advantage for a business in the Age of Intelligence, according to the lecture? a) Having the most powerful foundation model. b) Having the largest marketing budget. c) Having unique, proprietary data. d) Having the most employees.

3. The NVIDIA 2025 Trends Report highlights the emergence of "physical AI." Which of the following is the best example of this concept? a) An LLM that can write poetry. b) An AI-powered robot in a manufacturing plant. c) A software that can generate images from text. d) A chatbot for customer service.

Part 2: Short Answer

4. Explain the relationship between the "Software" layer (e.g., OpenAI) and the "Application/Data" layer of the AI Stack. Why is the Application/Data layer considered the primary site of unique value creation for most businesses?

Answer Key

1. c) NVIDIA. 2. c) Having unique, proprietary data. 3. b) An AI-powered robot in a manufacturing plant. 4. (Sample Answer): The "Software" layer provides the powerful, general-purpose foundation models (like those from OpenAI or Google) that anyone can access via an API. The "Application/Data" layer is where businesses build their own specific products on top of these models. This layer is the site of unique value creation because it's where a company can apply its own proprietary data to fine-tune or prompt the general models, creating a specialized AI that understands their unique business context, customers, and history. While competitors can use the same foundation model, they cannot copy this unique data, making it the most defensible moat.