The explosive growth of generative artificial intelligence (GenAI) heralds opportunity and disruption across industries. It is transforming how we interact with technology itself. During this early phase of GenAI technology, organizations are exploring new ways to leverage this technology to unlock business value. While there is enormous promise, there are also some concerns.
The 2024 State of AI Report by Forrester reveals the current state of GenAI in terms of demand and supply, how companies are adopting it, and the factors enterprises should consider when preparing to implement the technology.
The latest report by Forrester suggests that a wave of disruption is coming. GenAI will add convenience and remove friction from experiences but there is still widespread confusion and misunderstanding about the technology. The daily announcements of new partnerships, features, services, and products related to GenAI are not helping with the confusion.
Large language models (LLMs) like OpenAI’s GPT have been at the center of the GenAI growth. The Forrester report shows that a small number of key players dominate the LLM space. As the foundation models require years of development and millions of dollars of infrastructure, it is not surprising that the leading tech companies dominate this space.
The introduction of platforms like LoRA Land by Predibase is helping to level the playing field for smaller companies in the AI race. However, the larger tech companies are expected to continue their dominance, at least in the near future.
Forrester s 2023 report showed that over 90 percent of AI-decision makers around the globe have plans to implement GenAI customer-facing and internal use cases. Based on the latest data, the production use cases for GenAI remain limited to sophisticated organizations.
Organizations are expecting broad value from GenAI, with productivity, innovation, and cost efficiencies being the top goals. However, organizations are yet to realize the bottom-line impact of their GenAI investments, which is leading to a more cautious approach where they start with internal use cases and then gradually move to customer-facing and other external applications.
The widespread adoption of GenAI is still handicapped by a lack of AI skills (30 percent), difficulty in integrating GenAI with existing infrastructure (28 percent), and data security and privacy concerns (28 percent).
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Many organizations are waiting for the regulatory framework to mature and to have more clarity on the relevance of foundation models to their specific industries before they accelerate GenAI adoption.
GenAI is still new and has had remarkable growth since the start of 2023, however, it is still prone to hallucination, error, and bias. The technology is not designed to reason or fact-check, instead, it relies on millions of parameters and billions of data points to generate output.
The areas with the most impact of GenAi include employee productivity, customer support, and coding. These are functions that benefit the most from automating repetitive tasks to streamline workflows.
Based on the data collected in the study, Forester recommended setting governance guidelines and policies for the use of bring your own AI (BYOAI). As most of the AI operating in organizations is built by third-party vendors, organizations need to establish standards for evaluating GenAI in vendor solutions
Forrester also recommends leaders focus on high-value applications that have proven to deliver value. In addition, as GenAI becomes more complex, organizations must prepare to update their AI strategy with new standards and guardrails. There should be a continuous effort to keep evolving with the technology.
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