Recently, IT research firm Gartner positioned generative AI (GenAI) at the “peak of inflated expectations” in its hype cycle for emerging technologies. Based on Gartner’s model that assesses a technology’s maturity and potential, the next step is to sink into the “trough of despair.” After two to five years, the technology will eventually emerge with tangible benefits as it progresses through the “slope of enlightenment” into the “plateau of productivity.”
Hype occurs whenever a new technology is heavily promoted in the market, and its benefits are exaggerated or inflated. Early adopters are still determining whether the emerging technology will live up to its potential. Depending on what happens, it can fade into irrelevance or become an integral technology for businesses. In most cases, Gartner’s model accurately reflects how a new technology shifts from pure hype to something more tangible and real.
Phase 1: Initial excitement or buzz builds around a new technology.
Phase 2: Companies realize the technology is harder to implement than expected or the results aren’t as good as anticipated.
Phase 3: Innovative organizations eventually unlock the technology’s tangible benefits, and then their approaches are commercialized and replicated by other businesses.
Having worked in technology most of my career, I’ve seen different trends follow this pattern—SaaS, big data, IoT, metaverse, Web3, cloud computing, etc. Some landed, others crashed, and yet others are still in a holding pattern. However, I can’t remember a new technology like GenAI receiving the same amount of hype and being embraced as quickly as it has.
In a recent McKinsey report, one-third of the survey respondents indicated they regularly used GenAI in at least one business function. In a survey of over 1,000 companies, AIIA found more than two-thirds ranked GenAI as a top priority through the rest of 2023. In June, KPMG found three-quarters of business leaders viewed GenAI as a top-three emerging technology over the next 12-18 months. This early level of emphasis and usage is unparalleled, and it hints at why the technology is revolutionary and not just innovative.
Respected technology experts like Bill Gates see AI as being on the same level as electricity, antibiotics, automobiles, computers, mobile phones, and the Internet. Sir Patrick Vallance, the UK’s former chief scientist, indicated it “could be as transformative as the Industrial Revolution.” Many of us will only experience this level of technological disruption once or twice in a lifetime.
It’s important to remember GenAI represents only a subset of AI, but it is becoming a crucial catalyst or conduit for generating greater interest and investment in broader AI initiatives. I want to highlight three reasons why I believe GenAI uniquely differs from other recent technologies that haven’t seen the same level of rapid adoption and exploration.
1. It’s consumer-friendly
After OpenAI introduced GenAI to the masses with its launch of ChatGPT last November, a wide array of people—from students to senior executives—have been able to interact directly with the technology and get a taste of its potential.
Many back-end technologies can’t be directly interacted with, and they are more abstract for non-experts to process and understand. On the other hand, anyone can easily engage with a tool such as ChatGPT or Midjourney using ‘prompts’ and gain a deeper appreciation for its benefits. The ability to experiment directly with these tools at work and in their personal lives enables people across an organization to grasp better how they could utilize the technology in broader contexts.
The McKinsey report found that 79 percent of all respondents said they had some exposure to the technology inside or outside of work. Twenty-two percent of respondents indicated they were using it regularly on the job. Because senior leaders have been able to ‘test drive’ the GenAI for themselves, it has spurred a greater interest and buy-in for the technology that other less consumer-friendly technologies don’t enjoy.
McKinsey Senior Partner Alex Singla noted, “It’s amazing how quickly the conversation around generative AI has evolved. Just a few months ago, the conversation in the C-suite was pretty rudimentary, focused on trying to understand what it was and seeing what was hype versus what was reality. Now in just about six months, business leaders are having much more sophisticated conversations.”
2. GenAI supports a wide array of scenarios
Many new technologies only support limited applications in a narrow area. In addition, they may only impact specific roles and departments within organizations. GenAI can be used to create a wide variety of content, such as text, code, images, videos, audio, music, and other media. The productivity gains aren’t limited to just certain industries that are more content-intensive, such as the media and entertainment sector. It can span everything from drug discovery in the pharmaceutical industry to loan servicing and credit scoring in the banking industry.
From a functional perspective, the McKinsey report found GenAI currently being used most in the following three areas: Marketing and sales (14%), product and service development (13%), and customer service operations (10%). Under each of these functional areas, they highlighted the following use cases as being the most regularly reported:
Marketing and sales
- Crafting first drafts of text documents (9%)
- Personalized marketing (8%)
- Summarizing text documents (8%)
Product and/or service development
- Identifying trends in customer needs (7%)
- Drafting technical documents (5%)
- Creating new product designs (4%)
Service operations
- Use of chatbots (6%)
- Forecasting service trends or anomalies (5%)
- Creating first drafts of documents (5%)
With GenAI, you would be hard-pressed not to find a meaningful use case regardless of your industry or function. The broad array of potential applications adds to its allure and potency as an emerging technology.
McKinsey’s report also found that three-quarters of all respondents expect GenAI to “cause significant or disruptive change in the nature of their industry’s competition in the next three years.” Organizations must find the most advantageous use cases for GenAI before their competitors do.
3. Its massive benefits overshadow its potential risks
Unlike other technologies that are solely cost- or revenue-focused, GenAI helps in both areas. Salesforce’s research found that 82% of business leaders said GenAI will lower overall business costs, and 80% indicated it will increase revenue. McKinsey estimates that GenAI could add $2.6 to $4.4 trillion annually to the global economy.
With the tremendous upside offered by GenAI, organizations don’t appear to be as concerned about its potential risks. While McKinsey’s research showed more than half of the companies felt inaccurate data was the most significant risk, less than a third were working to mitigate it. Organizations also reported underwhelming mitigation efforts for other top risk factors such as cybersecurity, copyright infringement, regulatory compliance, explainability and data privacy.
I like comparing what GenAI produces to a smoothie that has content blended from various unnamed sources. Imagine if you only focused on the ease of acquiring a delicious, low-cost smoothie without any concerns about the recipe, ingredients, preparation and sourcing. Everything’s wonderful until you notice you’re allergic to one of the mystery ingredients, or you discover why the drinks were so affordable (the ingredients are being stolen from your neighbors).
Seeking Alpha analyst Bob O’Donnell finds GenAI differs from other major technology trends such as blockchain and cryptocurrency. Despite all the potential risks associated with GenAI, organizations “seem willing to overlook these problems because of the potential benefits it’s promised to unleash as well as the sense of urgency around the technology.”
When interviewed about Google’s AI efforts, CEO Sundar Pichai said, “I’ve always thought of AI as the most profound technology humanity is working on. More profound than fire or electricity or anything that we’ve done in the past.” Inc.com columnist Jason Aten noted that fire and electricity have been massively transformative for humanity but can also be incredibly dangerous and destructive.
As Marvel Comics Stan Lee wrote in the first Spider-Man comic, “With great power, there must also come—great responsibility.” Every organization should explore how it can leverage GenAI in its products, services, and processes. With this new technology’s power, there’s also an equal responsibility to mitigate the risks it introduces. Organizations must balance the drive to deliver value from AI with respecting how the value is created.
In my own data storytelling training business, I’m personally experimenting with how GenAI can help me with brainstorming, research, content creation and marketing. As a small business owner, GenAI has the potential to help my company to do far more with much less. However, it doesn’t replace my responsibility to be innovative and guide the technology toward the best possible outcomes as an entrepreneur.
If GenAI fails to deliver on its potential, it likely won’t be because of too much hype. It will be because we overlooked and mismanaged its potential risks. However, if we manage it responsibly, organizations of all sizes will unlock increased productivity, greater innovation and new revenue streams.
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