Published on January 17, 2024, 4:15 pm
Executives are recognizing generative AI as a critical business priority, although they are currently content with experimenting on a small scale. According to a survey conducted by the Boston Consulting Group, two-thirds of executives believe that it will take at least two years for generative AI to deliver tangible business benefits. In the meantime, 71% of executives are focused on limited experimentation and small-scale pilots.
This sentiment is echoed by tech analyst Gartner, which placed generative AI at the “peak of inflated expectations” in its annual tech hype cycle graph. While there is a lot of excitement surrounding the technology, it could still take two to five years before it becomes mainstream.
Despite this cautious approach, companies are increasing their spending on AI. The survey found that 71% of executives plan to increase their company’s tech investments this year, and 85% intend to specifically increase spending on AI. Additionally, 89% of surveyed executives ranked AI as a top-three tech priority for 2024 alongside cloud computing and cybersecurity.
However, many CEOs expressed dissatisfaction with their organization’s progress in implementing AI. They blamed factors such as a lack of talent and skills, an unclear roadmap, and investment priorities for hindering progress.
Interestingly, only 6% of companies have trained more than a quarter of their staff on generative AI tools so far. Nearly half (45%) of executives admitted that they do not yet have guidance or restrictions in place to regulate the use of generative AI in the workplace.
While some CEOs anticipate cost savings through productivity gains in operations, customer service, and IT due to AI implementation (54% expect savings this year), most companies remain cautious about investing heavily in generative AI. However, organizations planning investments exceeding $50 million in AI are significantly more likely to expect cost savings by 2024.
A different report from PwC presents a slightly more optimistic outlook on generative AI adoption. Approximately one-third of the CEOs surveyed stated that generative AI had been adopted across their organization in the past year or that their organization had altered its IT strategy as a result of AI. Over half of these CEOs expected AI to positively impact the quality of their company’s products or services within the next year, and two-thirds anticipated that most of their workforce would need to acquire new skills related to generative AI in the next three years.
Nevertheless, 25% of CEOs expect a reduction in headcount by at least 5% in 2024 due to generative AI. PwC clarified that companies making cuts may already be offsetting them with hiring in other areas. Industries such as media, banking, insurance, and transport are among those most likely to anticipate job losses resulting from generative AI.
PwC emphasized that CEOs must embrace their role in understanding, explaining, and managing the tensions between short-term job losses and long-term job creation potential brought about by AI. The report suggests that leading companies align their generative AI adoption efforts with existing digital and AI strategies, upskill employees, and foster experimentation throughout their organizations.
While enthusiasm for generative AI is high, it is important to note that this type of technology is only one facet of AI and has yet to fulfill its full potential. As companies navigate these early stages of adoption, they must carefully define their goals and objectives for utilizing this powerful technology.
In conclusion, while many executives believe it will take time for generative AI to deliver tangible business benefits beyond experimental stages, companies are increasing investments in AI overall. While concerns about skill gaps persist, some organizations have successfully integrated generative AI into their operations. As technology progresses and companies gain a better understanding of how to leverage its capabilities effectively, we can expect more widespread adoption and greater realization of its potential benefits.