We have been told for a couple of years that Generative AI is the best thing to have happened to the world of business in a very long time. It is supposed to revolutionize everything from the development of all new R&D models and enhancing productivity to better customer experiences and the creation of whole new business models.
According to premier management consultancy company BCG, as many as 85% of business leaders plan to increase their company’s spending in AI and GenAI by a whopping 85% in 2024. Besides, 54% of them think that AI will deliver cost savings in the current year on account of productivity gains across operations, customer service, and IT.[1]
Is GenAI Really All That It is Touted to Be?
There are recent reports that suggest that way more may have been invested in GenAI for the kind of benefits that it currently provides to a business.
In particular, a Goldman Sachs report alludes to an interview with Daron Acemoglu, Institute Professor at MIT in which he expresses his reservation about AI having any major impact on the economy and has in fact forecasted that it will impact not even 5% of all tasks over the next decade.
As a matter of fact, he believes that AI will increase US productivity by a mere 0.5% and a GDP growth of a pedestrian 0.9% over the next 10 years.[2] So much for all the billions going into just GenAI over the last two years!
On the other hand, the PwC 2024 AI Jobs Barometer report will have us believe that financial services, IT, and professional services sectors boasting relatively higher AI exposure have witnessed 6 times faster productivity growth than those with low exposure to AI.[3] But one can, all the same, detect an element of disenchantment with the technology in terms of its ability to deliver and provide real practical value.
There is a feeling of belied potential in the sense that GenAI hasn’t really reached a stage of development where it can be used in an optimal fashion. There is a lot of hype and speculation surrounding bold new announcements every few months, which does not seem to lead to much in terms of achievement and accomplishment.
With time, as expectations become more realistic with regard to what can possibly be delivered, there may be a resurgence of interest yet again, but tempered with realism.
The Way Ahead
As AI scales and grows in volume, one will notice that there will be an increasing focus on factors like regulating and governing technology, ownership, safety, and risk. There need to be efforts made by organizations who adopt and promote GenAI to reach out to their employees who fear it’s coming. It is important that businesses don’t attempt to better their prospects, by damaging those of their workers.
The companies that are the leaders in GenAI adoption are doing that by involving their employees in deciding how their work and roles should be reshaped.
GenAI is too good a technology to not be taken seriously, but it cannot be adopted in a massive way without making it prove itself. The process of maturation of the technology is a work in progress and it would be an interesting space to watch. The coming years will show us if it will really take over the world or just be a flash in the pan, albeit a brilliant one.
[1] https://www.bcg.com/publications/2024/from-potential-to-profit-with-genai
[2] https://www.ibm.com/blog/gen-ai-live-up-to-hype/
[3] https://www.forbes.com/sites/hamiltonmann/2024/05/22/dont-get-caught-up-in-the-genai-hype/