AI is the talk of the town, but businesses are still not ready for it, survey shows
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Generative AI adoption rate for businesses is yet to match the hype around the technology, with data privacy, regulation, and IT infrastructure acting as major barriers to its widespread use, according to a recent survey.
The global survey of more than 300 business leaders by MIT Technology Review Insights and Australia-based telecoms company Telstra revealed only 9% of them were significantly using AI.
While most leaders were optimistic about AI’s potential and expected to widen its usage, currently even the early adopters of this technology have deployed it for limited business areas.
“There is a misconception about how easy it is to run mature, enterprise-ready, generative AI,” said Stela Solar, Inaugural Director at Australia’s National Artificial Intelligence Centre in the survey report.
Its adoption may require companies to “improve data quality and capability, privacy measures, AI skilling, and implement organization-wide safe and responsible AI governance,” he added
“There are surrounding elements like the app design, connection to data and business processes, corporate policies, and more that are still needed.”
Ambitions and headwinds
Most business leaders said they expect the number of business functions or general purposes for which generative AI will be deployed to more than double by 2024.
Early adopters in 2023 had mostly deployed the technology for automating repetitive, low-value tasks due to them requiring less human supervision, said Chris Levanes, head of South Asia marketing at Telstra.
As many as 85% of the respondents expect to use generative AI for these low-value tasks by 2024, with 77% expecting to implement it in customer service and 74% for strategic analysis.
Product innovation, supply chain logistics, and sales were other areas for potential deployment.
The report, which labeled these plans as high on “ambition and hubris,” mentioned several headwinds to a widespread rollout of generative AI next year, specifically IT resources and capabilities.
Fewer than 30% of the respondents ranked the IT attributes at their companies as conducive to a rapid adoption of generative AI, with those rolling out generative AI reposing even less confidence in their IT infrastructure to support the new technology.
Meanwhile, 56% of the respondents said their IT investment budgets, in general, were a limiting factor in rolling out generative AI.
As many as 77% of the respondents cited regulation, compliance, and data privacy as key barriers to rapid employment of generative AI — a leading concern for generative AI ecosystem since the technology burst into prominence at the end of 2022 following the release of Open AI’s popular ChatGPT.
The technology has since led to numerous lawsuits related to the copyrights of AI-generated materials. Major companies have also experienced sensitive information leaks and security issues owed to its usage.
Speaking to media at a launch of the MIT report in Singapore on Monday, Laurence Liew, director for AI innovation at AI Singapore, reiterated that addressing these risks will require laying out well-established governance structures and security protocols for AI models.
“Companies must ask, do we have the appropriate governance in place, and are our internal documents properly segmented or secure?” said Liew, noting that businesses will want to avoid having AI models that can be tricked into disclosing private information such as employees’ salaries.
The ability to address these risks also relies on companies implementing robust internal cybersecurity measures, according to the report, with a thin majority of respondents saying that their cybersecurity measures are “at best modestly capable” of supporting a generative AI rollout.
Other barriers to generative AI adoption according to the survey respondents included the lack of relevant generative AI skills. Companies are worried they don’t have the right talent internally, and about its unavailability in the market.
Disruptors versus the disrupted
Still, the survey reflected overall positive sentiments about the future role of generative AI in business. While six of 10 respondents expect generative AI to substantially disrupt their industry in the next five years, 78% see it as a competitive opportunity. About 8% see it as a threat.
While building generative AI solutions that can responsibly handle large datasets and contextualize them for business is extremely challenging, it will soon be well worth the investment, according to Geraldine Kor, managing director of South Asia and head of global enterprise at Telstra International.
“When implemented successfully, [generative AI] proficiency will be a game-changer for most organizations and will distinguish leaders from followers,” she said in a statement about the survey on Monday.
According to a report from McKinsey released last year, generative AI is expected to have its biggest impact on sales, marketing, consumer operations, software development, and R&D sectors, and could add an estimated $4.4 trillion annually to the global economy.
Technology
Amazon CEO Jassy says AI will lead to ‘fewer people doing some of the jobs’ that get automated
Amazon CEO Andy Jassy said the rapid rollout of generative artificial intelligence means the company will one day require fewer employees to do some of the work that computers can handle.
“Like with every technical transformation, there will be fewer people doing some of the jobs that the technology actually starts to automate,” Jassy told CNBC’s Jim Cramer in an interview on Monday. “But there’s going to be other jobs.”
Even as AI eliminates the need for some roles, Amazon will continue to hire more employees in AI, robotics and elsewhere, Jassy said.
Earlier this month, Jassy admitted that he expects the company’s workforce to decline in the next few years as Amazon embraces generative AI and AI-powered software agents. He told staffers in a memo that it will be “hard to know exactly where this nets out over time” but that the corporate workforce will shrink as Amazon wrings more efficiencies out of the technology.
It’s a message that’s making its way across the tech sector. Salesforce CEO Marc Benioff last week claimed AI is doing 30% to 50% of the work at his software vendor. Other companies such as Shopify and Microsoft have urged employees to adopt the technology in their daily work. The CEO of Klarna said in May that the online lender has managed to shrink its headcount by about 40%, in part due to investments in AI and natural attrition in its workforce.
Jassy said on Monday that AI will free employees from “rote work” and “make all our jobs more interesting,” while enabling staffers to invent better services more quickly than before.
Amazon and other tech companies have also been shrinking their workforces through rolling layoffs over the past several years. Amazon has cut more than 27,000 jobs since the start of 2022, and it’s announced smaller, more targeted layoffs in its retail and devices units in recent months.
Amazon shares are flat so far this year, underperforming the Nasdaq, which has gained 5.5%. The stock is about 10% below its record reached in February, while fellow megacaps Meta, Microsoft and Nvidia are all trading at or very near record highs.
WATCH: Jassy says robots that will eventually do delivery and transportation
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., during the Meta Connect event on Wednesday, Sept. 25, 2024.
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Meta shares hit a record high on Monday, underscoring investor interest in the company’s new AI superintelligence group.
The company’s shares reached $747.90 during midday trading, topping Meta’s previous stock market record in February when it began laying off the 5% of its workforce that it deemed “low performers.”
Meta joins Microsoft and Nvidia among tech megacaps that have reached new highs of late, all closing at records Monday. Apple, Amazon, Alphabet and Tesla remain below their all-time highs reached late last year or early this year.
Meta CEO Mark Zuckerberg has been on an AI hiring blitz amid fierce competition with rivals such as OpenAI and Google parent Alphabet. Earlier in June, Meta said it would hire Scale AI CEO Alexandr Wang and some of his colleagues as part of a $14.3 billion investment into the executive’s data labeling and annotation startup.
The social media company also hired Nat Friedman and his business partner, Daniel Gross, the chief of Safe Superintelligence, an AI startup with a valuation of $32 billion, CNBC reported on June 19. Meta’s attempts to buy Safe Superintelligence were rebuffed by the startup’s founder and AI expert Ilya Sutskever, the report noted.
Wang and Friedman are the leaders of Meta’s new Superintelligence Labs, tasked with overseeing the company’s artificial intelligence foundation models, projects and research, a person familiar with the matter told CNBC. The term superintelligence refers to technology that exceeds human capability.
Bloomberg News first reported about the new superintelligence unit.
Meta has also snatched AI researchers from OpenAI. Sam Altman, OpenAI’s CEO, said during a podcast that Meta was offering signing bonuses as high as $100 million.
Andrew Bosworth, Meta’s technology chief, spoke about the social media company’s AI hiring spree during a June 20 interview with CNBC’s “Closing Bell Overtime,” saying that the talent market is “really incredible and kind of unprecedented in my 20-year career as a technology executive.”
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