The state of AI in 2023: Generative AI’s breakout year

The state of AI in 2023: Generative AI’s breakout year

In recent years, AI has become a topic of great interest, not just among tech employees, but also among company leaders. According to a survey, nearly one-quarter of C-suite executives personally use generative AI tools for work. Furthermore, one-quarter of respondents from companies using AI have already included generative AI on their boards' agendas.

However, despite the increasing adoption of generative AI, it is still early days for managing the risks associated with this technology. Less than half of the respondents say their organizations are actively mitigating the risk of inaccuracy, which is considered the most relevant risk. This highlights the need for companies to prioritize risk management when it comes to using generative AI.

Interestingly, there is already a significant amount of experimentation with generative AI tools, and respondents expect these new capabilities to transform their industries. In fact, 79 percent of all respondents have had some exposure to generative AI, either for work or outside of work, and 22 percent say they regularly use it in their own work.

The most commonly reported business functions using generative AI are marketing and sales, product and service development, and service operations such as customer care and back-office support. These are the same functions in which AI use is most common overall. This indicates that generative AI is being integrated into existing workflows and processes, rather than being used for completely new purposes.

The expectations for the impact of generative AI are high, with three-quarters of respondents expecting it to cause significant or disruptive change in the nature of their industry's competition in the next three years. Industries that rely heavily on knowledge work are likely to experience more disruption and potentially reap more value from generative AI. This is due to the strengths of generative AI in language-based activities, as opposed to physical labor.

However, despite the potential benefits, few companies seem fully prepared for the widespread use of generative AI and the business risks it may bring. Respondents cite inaccuracy as a major concern, even more frequently than cybersecurity and regulatory compliance. This highlights the need for organizations to address AI-related risks and ensure the accuracy of generative AI tools.

Interestingly, respondents from AI high performers are more likely to prioritize the creation of entirely new businesses or sources of revenue through generative AI. They also see the potential for increasing the value of existing offerings through new AI-based features. This indicates that companies with a strong AI strategy are looking beyond just improving existing processes and are actively exploring new opportunities enabled by generative AI.

Looking ahead to the next three years, respondents predict that the adoption of AI will reshape many roles in the workforce. While there may be concerns about job displacement, the majority of respondents expect more employees to be reskilled rather than separated. Nearly four in ten respondents expect more than 20 percent of their companies' workforces to be reskilled. Only 8 percent of respondents anticipate a decrease in workforce size by more than 20 percent.

However, when it comes specifically to generative AI, respondents expect a decrease in workforce size in the service operations function. This aligns with recent research that suggests while the emergence of generative AI increases the potential for automation, it doesn't necessarily mean the automation of entire roles.

In conclusion, the state of AI in 2023 is marked by the breakout year of generative AI. It has gained significant attention and adoption among company leaders, with expectations of transforming industries. However, there is still a need for organizations to address the risks associated with generative AI, particularly inaccuracy. Reskilling efforts will be crucial to ensure that the workforce can adapt to the changing landscape, and companies need to prioritize creating new businesses and revenue sources through generative AI. Overall, the future of AI looks promising, but it requires careful management and strategic decision-making.

Actionable advice:

1. Prioritize risk management: Ensure that your organization is actively mitigating the risks associated with generative AI, particularly inaccuracy. This will help build trust in the technology and minimize potential negative impacts.
2. Invest in reskilling: As AI adoption reshapes roles in the workforce, prioritize reskilling efforts to ensure that employees can adapt to the changing landscape. This will help maximize the benefits of generative AI and minimize job displacement.
3. Explore new opportunities: Look beyond just improving existing processes and explore new business opportunities enabled by generative AI. This could involve creating entirely new businesses or finding ways to increase the value of existing offerings through new AI-based features.

By following these actionable advice, organizations can navigate the evolving AI landscape and harness the full potential of generative AI in the years to come.