Well that was fast. Here we thought we’d get at least another year or two of clueless C-suite executives telling Big 4 survey takers they plan to deploy generative AI in the next year even though they have no idea what generative AI is.
Software company Lucidworks has released its second annual Generative AI Global Benchmark Study and the results reflect a sudden collision of AI dreams and practical reality. While 93 percent of the more than 1,000 businesses surveyed last year planned to increase spending on generative AI, that number is now down to 63 percent globally and 69 percent for US-based respondents. It’s like they suddenly realized implementing AI costs money and comes with security risks.
Said Lucidworks in the press release:
Despite initial hype, slow deployment and low success rates are commonplace, with only 25% of planned projects fully implemented. This lag is stalling anticipated ROI, with 42% of companies yet to see a significant benefit from generative AI initiatives. Tech and retail sectors stand out with higher deployment and realized gains, but overall, most industries are slow to move beyond the pilot phase.
Security remains a top concern for business leaders, but cost worries have surged 14x in the past year. Additionally, concerns around response accuracy have risen 5x, likely due to issues with hallucinations. This highlights the need for careful large language model selection to balance cost and ensure accurate, secure results.
If 2023 was all about AI’s potential, 2024 is all about the worries.
A few more key findings:
- Across all organizations, 36% of leaders plan to keep spending flat, compared to only 6% in last year’s survey
- Only 49% of Chinese leaders plan to increase AI spending in 2024, a massive drop from 100% in 2023
- Close to 70% of financial services companies plan to increase spending over the next 12 months, followed closely by tech at 68% and B2C retail at 64%
- Roughly 20% of companies report significant delays during deployment with only one in five planned revenue and growth initiatives and one in eight OpEx cost reduction initiatives implemented
- Nearly eight in 10 companies use commercial LLMs and 21% have opted for open source only
- A third of business leaders feel like they’re falling behind competitors despite almost everyone struggling to implement this new technology
“The initial wave of enthusiasm for generative AI is being met with a more strategic approach,” said Mike Sinoway, CEO, Lucidworks. “Businesses are recognizing the potential of this technology, but they’re also cautious about the risks and costs. This is reflected in the flattened spending, which suggests a shift toward more thoughtful planning. This planning ensures AI adoption delivers real value, balancing the need to stay competitive with managing costs and potential risks.”
Delays, Implementation Issues, and Unrealized Benefits Challenge Generative AI Initiatives in 2024 [Lucidworks]
I still suspect that AI is a bunch of bullshit. The latest bullshit fad, this one replacing cryptocurrency at the top of the list. As time goes by, my suspicions are appearing to be confirmed.
Is AI real? Yes. Can it help us with some menial tasks? Yes. Is its most useful purpose to create fake porn videos of celebrities? Possibly. Are some suckers going to lose a lot of money because of their belief in AI? Probably. Is it going to completely change the world and put us all out of work? Doubtful.
Yet to see how AI is going to fix the problem of getting a pile of hot garbage from clients into a software program. Is there a place for AI….of course. Is it going to revolutionize public accounting and reduce the ridiculous amount of hours expected of its people….not buying it.