There seems to be a disconnect between the forward-looking communications by CEOs or other senior people and what we see actually happening in enterprises. Almost every CEO says generative AI will be hugely transformative. It will restructure business. There is a lot in the press with examples of firms making big investments in generative AI. But a lot of it comes in the form of tech firms. For example, consider the chips that drive AI. There is a big rush to build data centers and compute capacity that allows the generative AI models to run. These are the hardware players. But when we look at the actual usage in large organizations, who is using gen AI? What is creating the gen AI wave? At this point, it looks like much of the money being spent is not for companies using it. The actual consumption of generative AI by companies and individuals seems to be quite limited. Yes, a few generative AI applications have moved into production. But as I blogged in the past, it does not look like a high proportion of those pilots that companies experimented with in 2023 will move into production in 2024. Where is the disconnect coming from? We see tech firms making huge expenditures, but there is limited visible use in businesses. Not a lot of consumption is happening. I believe it is quite probable that most of the visible expenditures for compute capacity were built in anticipation of large businesses moving quickly to adopt gen AI broadly. What if it does not happen that way? Are we looking at a premature set of investments? The facts on the ground do not support the thesis that large organizations will be the primary consumers. Thus, we effectively have two sources of disconnect: those selling gen AI vs. those that consume it.
Full commentary : The great disconnect: those selling gen AI vs. those that consume it, how is the leadership handling generative artificial intelligence pricing changes In 2024.
