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The meteoric rise of generative AI in the last few months as a consumer tool has driven optimism about its transformative potential for businesses. This is evident in the level of investment in GenAI initiatives and the prevalence of C-suite executives who support GenAI initiatives.
While businesses are serious about GenAI, they are still trying to figure out how to best use it to derive business value at scale. Infosys, a global lead in next-generation digital services and consulting, released its Generative AI 2023 Report which helps explain some of the key trends in the industry.
Data for the report was collected from over 1,000 organizations in the U.S. and Canada. To gain additional insights, the researchers also surveyed business leaders and subject matter experts.
The findings of the report highlight that organizations are optimistic about GenAI and are looking for ways to implement it. U.S. and Canadian firms are set to invest $5.6 billion in generative AI projects in the next 12 months, up 67 percent from $3.3B. However, there are some key challenges, including the AI-hype cycle, data and privacy challenges, and ethical concerns.
Satish H.C., Executive Vice President, Co-Head Delivery, Infosys, said, “Generative AI is unlike any recent digital disruptors. Investment is flowing in fast, and our report establishes that these projects are generating value that is recognized at the C-suite. By embedding responsible AI techniques and developing an AI-first operating model, business leaders can realize the full potential of this new technology.”
Surprisingly, companies with more than $10 billion in revenue are more likely to adopt GenAI. This is contradictory to the belief that smaller companies that are more nimble should be more receptive to adopting AI. However, 73% of companies with over $10 billion in revenue have implemented generative AI solutions, compared to less than 38 percent of smaller companies.
The data from the report suggests that larger companies seem to outpace smaller ones in extracting value from GenAI technology. This could be a result of low entry barriers and opportunity costs to engage GenAI.
You would expect highly regulated industries to lag behind others, however, that is not the case with GenAI. Data shows that the adoption rate is highest in the healthcare, life sciences, and financial services sectors which have traditionally been slow to adopt new technologies.
Infosys Logo (PRNewsfoto/Infosys)
The report also shows that businesses view GenAI as a crucial tool for improving user experience and personalization, business growth, and efficiency. Around 88% of companies expect revenue to be positively impacted by generative AI. However, only a small share of businesses view GenAI as an important tool for content creation and creativity.
Only 13 percent of companies identify content creation and creativity as generative AI’s most impactful areas. That is surprising because that is where this technology has seen the most success as a consumer tool.
The findings of the report show that 26 percent of companies believe that data privacy and security is their primary challenge, while 23 percent list data usability as their main challenge. Nearly 20 percent see a lack of skills, knowledge, or resources as the largest adoption obstacles.
According to Infosys, businesses will face a harsh reality check in the coming year and companies will have to overcome disillusionment. GenAI is in the early stage of the hype curve and the race to gain a competitive advantage could result in focused investments and skipped foundational steps.
In addition, the combination of expectations mismatch, ethics, and bias risks, and data challenges is a major hurdle for organizations. The potential of GenAI is enough to keep organizations determined on their goal to extract value from it, however, they will have to overcome some serious challenges to succeed.
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