I’m a sucker for the Gartner Hype Cycle. Gartner’s 2024 Hype Cycle emphasizes the importance of enterprises strategically adopting emerging technologies like autonomous AI and human-centric security. Generative AI is positioned at the “Peak of Inflated Expectations,” urging organizations to assess their ROI and maturity before deployment.
The Hype Cycle identifies four emerging technology themes: autonomous AI, AI-augmented software development, total experience, and human-centric security. The total experience concept aims to enhance customer and employee interactions.
Human-centric approaches in cybersecurity advocate for a culture of trust and adequate training. The report also addresses the need for realistic expectations regarding autonomous AI technologies and promotes tools to enhance developer productivity, stressing that technology should harmonize with human capabilities.
According to data presented by Stocklytics.com, By 2030, generative AI is projected to account for over 40% of the total AI industry market size, growing from $36 billion in 2024 to $356 billion. The user base for generative AI tools is expected to reach nearly 730 million, with significant growth driven by investments from major tech companies and increasing global interest. While the U.S. will remain the largest market, China’s generative AI industry is set to grow by 903%, fueled by government support and a vast consumer base.
But, Generative AI is projected to be less profitable than previous tech waves, with RBC analysts estimating gross profit margins could drop from 75% to around 60% due to high development and operational costs. Despite this, they anticipate that the revenue from AI-powered software could double or triple, potentially leading to higher absolute profit dollars, even with lower margins.
Generative AI is on the way down. I may be early to think it’s in the trough of disillusionment, but Gartner is placing it as just about to enter. Regardless of “in” or “about to”, the backlash is real. The key is that this is normal. Podcast listeners will get a great discussion about this from the live show, dropping tomorrow in the feed.
Thus, the key is finding the most useful use cases and matching solutions to customer needs. I’m intrigued by the RBC data about profitability – I’m doubtful this will impact services revenue, as good advice is still good advice. Let’s be aware, particularly as this might impact vendor strategies if they have to drive more volume.