How AI Agents Are Transforming Customer Service

Artificial Intelligence (AI) has been making waves across industries, and nowhere is its transformative power more evident than in customer service and other specialized sectors like legal and enterprise solutions. In a recent conversation with Brett Taylor, CEO of Sierra, and Winston Weinberg, CEO of Harvey - two leading startups in the AI agent industry - the discussion illuminated the current state of the AI market and its trajectory. Both leaders shared insights into how AI is redefining business operations, reducing costs, and creating unprecedented opportunities for efficiency and growth.

This article synthesizes their insights, while offering actionable context for small and medium-sized business owners or managers who are looking to harness AI's potential.

The Rise of AI Agents: A New Era for Business Efficiency

AI agents, powered by large language models (LLMs), are becoming indispensable tools for businesses aiming to streamline operations and improve customer engagement. Brett Taylor described this moment as a paradigm shift, likening its significance to the dot-com boom and the advent of mobile technology. Businesses are not merely exploring AI - they are actively implementing it in areas where the potential for cost savings and improved outcomes is clear.

For customer service in particular, AI agents promise to not only reduce costs but also fundamentally change how businesses interact with their customers. By autonomously resolving tasks such as customer inquiries, technical support, and even sales, these tools are making once-unthinkable services scalable and affordable.

Why AI Agents Are Gaining Traction

Both CEOs emphasized the value of AI agents in delivering measurable business outcomes. According to Taylor, one of the reasons startups like Sierra are gaining traction is the shift toward a "best-of-breed" approach. Rather than relying on broad, one-size-fits-all platforms from large enterprise providers, businesses are opting for specialized solutions that excel in specific tasks.

One compelling example: AI agents can reduce call center costs from $20–30 per interaction to as low as $0.20. This cost reduction enables companies to improve customer engagement without treating it as a mere cost center. The result? Personalized, multilingual customer service becomes viable for businesses of all sizes.

The Legal Sector: A Case Study in AI's Potential

Harvey’s Winston Weinberg shared an equally compelling perspective from the legal industry, traditionally seen as risk-averse and slow to adopt new technologies. By automating labor-intensive tasks, AI not only enhances efficiency but also redefines the future of legal work.

Weinberg explained that while the ROI calculation for law firms may differ from other sectors, AI’s value shines in areas like junior associate work. By automating mundane tasks, AI frees junior lawyers to focus on higher-value, more rewarding activities, improving overall job satisfaction and productivity.

In addition, AI’s impact extends beyond efficiency to enable faster decision-making in high-stakes matters like mergers and acquisitions. AI agents facilitate speed and precision, which can prevent deals from stalling - a critical factor in industries where delays often mean the difference between success and failure.

Pricing Models That Align Incentives

One of the most transformative ideas discussed was Sierra’s innovative pricing model: businesses only pay when the AI agent successfully completes a task. As Taylor explained, this "pay-per-outcome" model creates a direct alignment of incentives between AI providers and their customers.

This model flips traditional software pricing on its head. Instead of paying for access or usage, businesses pay for measurable results, whether it’s a resolved customer query or a completed sale. For smaller businesses with limited budgets, this ensures a clear and tangible ROI, making AI adoption a safer and more appealing investment.

Challenges and the Future of AI Agents

Despite the enthusiasm, challenges remain. One key issue is the interoperability of AI agents. As businesses adopt multiple agents for different tasks, ensuring these systems work seamlessly together becomes increasingly complex. The future may involve a layered ecosystem where specialized agents interact across verticals, but whether this will favor small innovators or large incumbents remains unclear.

Another challenge lies in balancing costs and performance. Foundation model providers, such as OpenAI, require significant investment to develop and maintain their models. However, both Taylor and Weinberg were optimistic that competition in this space would keep costs reasonable. Additionally, businesses can benefit by using a mix of high-performance and simpler, task-specific models, depending on the required functionality.

Finally, the evolution of AI itself raises questions. As Weinberg noted, the bottleneck in adoption often isn’t the reasoning ability of AI but rather the ability to integrate all the necessary context and data into the system. For many industries, the AI we have today is already more capable than what is currently being utilized.

Key Takeaways

AI Agents Are Transformative: AI agents are not just about efficiency - they are changing how businesses engage with customers and solve problems, particularly in high-cost industries like customer service and legal.
Best-of-Breed Solutions Win: Businesses are moving away from general platforms to specialized tools that excel in specific tasks.
Innovative Pricing Models: Pay-per-outcome pricing ensures businesses only pay for measurable results, reducing financial risk and increasing ROI.
Legal Sector Embraces Change: Beyond cost savings, AI is reshaping the legal industry's operating models, improving both job satisfaction and profitability.
Interoperability Is Critical: As businesses adopt multiple agents, ensuring seamless collaboration between systems will be a key challenge.
Competition Will Contain Costs: The foundation model market is expected to remain competitive, preventing prohibitive costs for applied AI companies.
Focus on Context, Not Just Intelligence: Integrating the right data and context into AI systems is often a bigger challenge than improving their reasoning capabilities.
The Future Belongs to Innovators: Companies like Sierra and Harvey are poised to challenge incumbents by delivering sustained value and customer success.

Conclusion

AI agents are forging a new path in customer service, legal work, and beyond. By drastically reducing costs, improving efficiency, and enabling new capabilities, they are helping businesses of all sizes compete in an increasingly complex landscape.

However, AI adoption isn’t just about efficiency - it’s about transformation. Businesses that embrace these technologies thoughtfully, choosing best-of-breed solutions and innovative pricing models, will find themselves better positioned to thrive in the years to come.

As Brett Taylor and Winston Weinberg emphasized, the race to become the industry standard is still in its early stages. But one thing is clear: the businesses that invest in AI today are building the foundation for tomorrow’s success.

Source: "The AI Agents Reshaping Customer Service & Law (Bret Taylor & Winston Weinberg)" - The Information, YouTube, Aug 20, 2025 - https://www.youtube.com/watch?v=98Jtd4o4H9Q

Use: Embedded for reference. Brief quotes used for commentary/review.