Before I do too many AI stories, let’s talk about the actual reality on the ground, as Generative AI has not significantly impacted IT spending, according to Gartner. While global IT spending is expected to increase by 8% in 2024, generative AI has yet to drive notable increases in the short term. However, Gartner predicts this will change in 2025 as more tangible business use cases and increased investment in the technology emerge. Despite the current lack of impact, organizations are still investing in broader AI and automation strategies to optimize efficiency and bridge IT talent gaps.
According to a report by the International Data Corporation (IDC), spending on generative AI solutions is predicted to reach $143 billion by 2027. This represents a compound annual growth rate (CAGR) of 73.3% over the forecast period of 2023-2027. The report highlights that generative AI is a transformative technology with significant business impact, and its growth rate is more than twice that of overall AI spending. IDC also forecasts a natural progression from early experimentation to widespread adoption of generative AI tools in the coming years.
According to research by Indeed, almost a fifth of jobs will be severely impacted by artificial intelligence (AI). The report found that all jobs face potential exposure to AI-driven change, with 19.8% of jobs facing the highest possible exposure. Indeed is using AI to improve job connections and provide recommended salaries and job applicants for employers.
And Axios covers the potential bubble here. Predictions of a massive payoff from AI investments are soaring, but the actual profit and revenue in the sector remain sparse. Despite skepticism and warnings of an AI-driven apocalypse, AI is currently a hot genre in tech investment, with $17.9 billion invested in startups during the third quarter. Extreme predictions of AI’s impact and potential profit come from venture capital and investing leaders, while practical difficulties in machine learning are often overlooked. Some see The AI wave as the latest leap in digital technology’s capabilities, with expected financial winners and losers, productivity gains, and economic disruptions.
Why do we care?
While I believe AI is one of the most significant technology shifts seen in a while…. The timeline of the impact is up for debate. Analysts like me are almost always more aggressive about timelines than reality. That’s good –you probably have more time than you might think to be effective… yet do not take that as a sign to wait and see. The trick to momentum is that getting started is always the most challenging part, and only when you’re at speed can you see the progress in the rearview mirror.
If we’re debating 2024 versus 2025, most organizations will need to build up capacity and experience to take advantage. And that means planning … now. Waiting might leave you and your clients playing catch-up in a game where first-movers could have a significant advantage.