As it’s ChatGPT’s first birthday, now seems like a good time to look back at what its arrival has sparked, and to look forward at what might happen next with Generative AI.
There is no doubt that when OpenAI launched ChatGPT in late November 2022, it kickstarted a huge new wave of excitement about the potential for AI within business. A major survey conducted by IDC in August 2023 showed that in just a few months, we arrived at the situation where 75% of European organizations said they were already working with Generative AI (GenAI) in some capacity. What’s more, 18% of European organizations said that GenAI had already disrupted their business to some extent.
In August 2023. That’s just 9 months after ChatGPT’s debut.
It’s important that we remember that GenAI didn’t come from nowhere: prior to ChatGPT’s launch, a number of organisations (including Google, and OpenAI itself) had been working on GenAI technologies for years. But it was ChatGPT’s user-friendly conversational interface, and free service, that created high levels of awareness about what GenAI might be able to do – in an extraordinarily short space of time.
Of course, it’s important to note (as we have in numerous publications) that the GenAI opportunity is about much more than chatbots. Organizations are exploring use cases spanning marketing content generation, knowledge management, automation of software development activities, and much more.
Together, this span of use cases is driving massive interest. Some other key insights from IDC’s August GenAI survey:
- 55% of European organizations said their C-Suite leaders are actively engaged with IT leaders about GenAI on a regular basis.
- European C-Suite leaders are most interested in how GenAI can have an impact on customer experience (24.3% said this was the most sought information); how it can improve the performance of decision making (18.1%) and how it can improve employee productivity (15.8%).
- European C-Suite leaders want to move fast: 88% of respondents said their C-Suite leaders wanted to integrate GenAI into applications and processes within 18 months.
- On average, European organizations expected that investments in GenAI would account for 11% of new IT project budget in the next 18 months.
IDC forecasts that worldwide spending on GenAI implementation will reach $143.1B by 2027: that accounts for about 28% of the expected overall spending on AI implementation in that year. At a 5-year CAGR of 73.3% between 2023 and 2027, this represents a colossal market opportunity, that will significantly affect existing hardware, software and services markets.
As a result, it’s natural that OpenAI has now been joined by many new competitors all aiming to provide commercial GenAI models. The company now has competition from AWS, Google, and IBM, as well as other specialists (Cohere, Anthropic, Mistral, Inflection and Aleph Alpha are some examples). And enterprise application vendors like SAP, Salesforce and ServiceNow are leveraging open-source alternatives as well as partnering with a wide range of commercial model providers, in order to embed GenAI features in their application suites and platforms.
So – with GenAI set to be a major force in enterprise technology over the coming years, what happens next?
I’ve long wondered whether OpenAI might be an outlier in terms of how it approaches the GenAI opportunity; and indeed, whether its strategy makes it risky to focus too much on what OpenAI does, as a way to get a sense of overall market direction. I’ve said multiple times to colleagues and clients that OpenAI is more like a research outfit that is figuring out how to make its tech available to the world, than a product company.
Certainly, OpenAI has been culturally distinct from its competitors since before the launch of ChatGPT. While its competitors are primarily focused on developing products that businesses can use, OpenAI has operated as a hybrid between a not-for-profit research outfit committed to trying to develop what it calls “AGI” (Artificial General Intelligence) – something that many commentators feel is a very long-term project – and a commercial venture. Because it is at least partly focused on this long term mission, OpenAI is less focused than many of its competitors on meeting the real-world current needs of business customers. Which means that although OpenAI created the market that we see today, its future as a significant force in the market is far from guaranteed.
This question has come into sharp focus in recent days, as a soap opera has rapidly unfolded at OpenAI. On November 17th, without any warning, the company’s board fired its CEO, Sam Altman. The company’s President and co-founder Greg Brockman also quit. But within 48 hours, investors in the company called for Altman’s reinstatement as CEO, and for the board to quit instead. At the same time, Satya Nadella, CEO of Microsoft (OpenAI’s strategic investment backer) announced that Altman and Brockman would join Microsoft to found a new AI research lab; and hundreds of OpenAI employees signed an open letter to OpenAI’s board, saying they would quit unless Altman and Brockman were reinstated.
At one year old, human children are a hot mess of crying, screaming and unexpected and unmanaged bodily functions. Based on current events, it looks like the organization behind ChatGPT, which kicked off so much industry excitement, might be exhibiting the same tendencies…
For more information on GenAI in EMEA download our eBook: Generative AI in EMEA: Opportunities, Risks, and Futures , or visit our website.