The rapid emergence of Artificial Intelligence (AI) is reshaping the business landscape, presenting both significant opportunities and considerable implementation challenges. Duncan Chater, from Bloomberg Media, outlines the readiness of businesses to use this technology.

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Emergence of AI

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Following ChatGPT's launch in 2022, the AI industry is predicted to be worth $1.6 trillion within ten years, underscoring the transformative potential of this technology. While there's a consensus that generative AI is currently overhyped in the short term, its long-term impact is significantly underestimated. This indicates that we are still only in the early stages of understanding AI's capacity for value creation and businesses must prepare for rapid change across all business functions.

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Despite this, generative AI's popularity as an important tool is growing among business leaders, with an increase from 17% to 35% in the usage of such tools between May 2023 and April 2024; while search engines are becoming less relied upon (74% to 63%). At the same time, AI-enabled copilot tools are also experiencing moderate growth (10% to 16%). However, lingering concerns regarding the accuracy and trustworthiness of AI-generated content remain a barrier. Businesses must be vigilant about the data sources used by AI, ensuring they are transparent with their approach and mindful of the potential for misinformation and homogenisation.

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Content creation is one of the most significant opportunities for generative AI applications. It's estimated that by 2026, 90% of online content could be synthetically generated. This rapid advancement and widespread use could potentially lead to an AI model collapse. Such a high volume of AI-generated content has serious implications. If the data sets are not diverse, there is a risk that the AI will perpetuate bias. Relying on AI will also open the door for inaccuracies becoming more commonplace. On the other hand, it may also lead to a realignment in the value placed on human interactions.

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Growing Optimism

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Despite the potential pitfalls, there has been a noticeable shift in business leaders’ attitudes towards AI. In 2023, half of businesses were apprehensive about AI, with four clear clusters emerging:

1. Embracing (22%): They are excited about AI, but express a need for improved regulation so that it can be implemented effectively.
2. Watchful (41%): Despite being intrigued about AI, they are hesitant to use it without a clear business case.
3. Uninvolved (28%): They do not see business applications for AI and have no interest in testing it.
4. Fearful (9%): They are afraid of the implications of using AI and determined to avoid it.

However, in 2024 many of these leaders are now more optimistic about AI's potential, with none remaining fearful about the technology. At the same time, there was a 22% increase in the number of business leaders embracing AI as awareness of its capabilities continues to escalate, accounting for over a quarter of all respondents (27%). On the other hand, while the watchful cluster decreased by 11%, the uninvolved cluster also grew by 31%. Such shifts show that, in the space of a year, businesses have made clear strategic decisions around whether they wish to invest in AI, with almost equal divisions between those who are embracing AI, those waiting for it to develop further and those who have decided AI is not relevant for solving the challenges faced by their organisation.

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While business leaders are comfortable using generative AI for data processing, such as analytics, assessing cyber security threats and targeted advertising, they are less assured with using AI for tasks that require empathy. With this in mind, the concept of ‘human-in-the-loop’ is gaining traction, recognising the importance of human involvement in AI processes. This ensures the results align with desired ethical and quality standards and reduces the potential for discriminatory outputs.

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Ensuring Responsible AI Applications

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There is a strong feeling among business leaders that regulation is required, with nearly three-quarters (74%) supporting future government intervention. However, the disparity in regulations across different countries poses a significant challenge. This lack of a clear alignment in the direction of AI legislation is holding back the pace of change, particularly when considering how it can be effectively leveraged in companies with a global presence.

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Taking a strategic approach to integrating AI, businesses need to focus on long-term value creation and ensuring that there is buy-in across the organisation. This requires more education to enable everyone to understand AI's potential and that all teams and individuals feel empowered to use it effectively. This also requires creating an open space for encouraging engagement with AI, including the active experimentation of AI tools to fully understand what they can and can't do.

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To alleviate concerns about responsible AI applications, many businesses are consulting ethics boards about project developments. These boards need diverse voices who understand the potential implications of business decisions in achieving a desired outcome and an understanding of the risks involved. As such, many parallels can be drawn between responsible AI applications and how ESG reporting has enabled standardisation in the way businesses approach sustainability.