C-Suite Predicts 2024 as a Pivotal Year for Generative AI's Financial Impact

Welcome to this week’s Inferenz newsletter!

Today, we’re excited to share insights from Icertis' groundbreaking AI impact report, "The Future of Generative AI: C-Suite Perspectives for 2024 and Beyond." This inaugural report captures the sentiments of 500 senior executives from businesses across the U.S. and U.K., providing a glimpse into how Artificial Intelligence (AI) is set to reshape our professional landscape.

In Generative AI Endgame: Sneak Peak into Its Financial Performance

When it comes to Gen AI, we find ourselves at a revolutionary juncture, particularly with the wide proliferation and adoption of generative AI. The burning question on everyone's mind is whether AI will live up to the hype regarding its value for businesses.?

According to the survey, the resounding answer from forward-looking leaders is a definitive "yes." The profound effects of AI on enterprises are imminent, with 2024 emerging as a pivotal year.

Monish Darda, CTO and Co-founder of Icertis emphasizes, "2024 will be pivotal to determine which use cases deliver tangible outcomes as companies tap into rich data pools that exist within their organizations, enabling them to harness the full power of AI and bring it to life across critical functions like legal, finance, procurement, and ESG initiatives."

Important Things that We Need to Consider First?

The survey sheds light on key themes, revealing concerns and new opportunities for reimagining strategic advantages with AI. Senior leaders are almost equally concerned about the impact of AI on data privacy and security, the workforce, company financials, technology strategy, industry competition, and the regulatory environment.

1. Governance of AI Budgets: Differing Perspectives

A notable point of contention arises regarding the governance of AI budgets. While 34% of executives believe the CEO should oversee the AI budget, an equal percentage argue that it should fall under the purview of the CTO or CIO. Interestingly, 22% of U.K. executives see the CFO as the rightful owner of the AI budget, in contrast to only 8% of U.S. leaders, showcasing diverging views on the role of finance in AI initiatives.

2. Imminent Financial Implications: The Bottom-Line Impact

Nearly half of the C-suite leaders agree that AI will impact their bottom line in 2024, with an additional 36% anticipating financial effects within the next two to five years. Revenue and cost-cutting take center stage, with 56% prioritizing AI use cases that deliver immediate impacts in these areas, while 37% focus on risk management use cases.

John Frémont, founder and chief strategy officer, Hypergiant once said, “There’s no one thing that defines AI. It’s more like a tapestry of modern intelligent technologies knit together strategically that can uplift and create an automated knowledge base — where you can extrapolate findings from there.”. We wonder how he might feel about the upcoming trends and foresight.

3. Competition Catalyzed by AI Adoption

A striking 56% of the C-suite envisions AI as a catalyst for greater competition, minimizing gaps between competitors. In contrast, only 21% believe AI will lessen competition by exaggerating gaps between early adopters and laggards.

4. AI as a Strategic Partner in the Boardroom

While 90% express concern that AI may automate strategic initiatives managed by the C-suite, 52% are proactively planning to create new mid-to-senior level positions directly tied to AI in 2024. Executives recognize that employment levels will be a key macroeconomic factor driving AI adoption in the year ahead, especially in navigating a tight labor market.

5. Balancing Innovation and Ethics: A Delicate Dance

Leaders showcase a willingness to stall AI innovation in the name of ethics, with 42% favoring government regulations prioritizing responsibility and ethics over opportunities for innovation. This sentiment is more pronounced in the U.K. at 46%, compared to 38% in the U.S. Conversely, 30% of senior leaders prefer regulations prioritizing AI innovation for faster development. Remember when Kathy Baxter, Principal Architect, Responsible AI & Tech at Salesforce, said, “The three big categories [for building ethics into AI] are first, creating an ethical culture; then being transparent; and then finally taking the action of removing exclusion, whether that’s in your data sets or your algorithms.”

6. Data Security: The Cornerstone of Trust

Data security emerges as the cornerstone of trust in AI technology vendors. It is the top factor influencing trust among executives. Nearly half of the C-suite leaders discourage employees from sharing company data with public AI models, underscoring the importance of safeguarding sensitive information, including financials, contract data, tech development data, and customer data.

Generative AI is Here To Stay

As we stand on the cusp of 2024, the transformative power of generative AI is poised to reshape how businesses operate and compete. The road ahead is paved with challenges and opportunities, and organizations strategically navigating this landscape will undoubtedly secure a competitive edge.

We would finish our newsletter by highlighting what Timnit Gebru, Founder & Executive Director at The Distributed AI Research Institute (DAIR), once said poignantly,

“We’re seeing it as a kind of a Wild West situation with AI and regulation right now. The scale at which businesses adopt AI technologies isn’t matched by clear guidelines to regulate algorithms and help researchers avoid the pitfalls of bias in datasets. We need to advocate for a better system of checks and balances to test AI for bias and fairness and help businesses determine whether certain use cases are appropriate for this technology.”

Here's to the future of AI, where innovation meets responsibility and businesses thrive in the era of generative intelligence. Inferenz is proud to have helped clients across industries implement AI/ML development. We look forward to transforming more businesses shortly. For more insights and news, subscribe to our newsletter today!