Artificial intelligence products have matured in exciting ways over the last two years, and investors are starting to notice. Research from Gartner shows that business use of AI has grown by over 270% since 2015. Meanwhile, Deloitte’s State of AI in the Enterprise report shows that 74% of enterprise applications will have integrated AI capabilities by 2023.
As such, levels of investment in AI technology are booming. For example, one company was recently able to raise $270 million on a valuation of $2.7 billion. AI companies raised almost $40 billion in investment during 2019, and this year will probably outpace the last. IDC predicts that spending on AI will approach $98 billion by 2023.
High levels of both investment and adoption point to a near future in which AI is ubiquitous. This is going to have marked effects on both the AI industry and on users of AI.
The First-Mover Advantage of AI is Decreasing
It used to be that if you were the first organization in your industry to adopt AI successfully, you’d gain a sizable competitive advantage over your peers. Research from Microsoft shows that companies who implement AI can outperform those that don’t by up to 11.5%.
This advantage is going to disappear, because soon enough every company in every industry is going to adopt an AI suite that includes mission-critical technologies (machine learning, deep learning, intelligent automation, natural language processing) and enjoy that 11.5% bump. Instead of merely adopting AI, companies will need to adopt it creatively, adopt best-in-class products, or use AI as a competitive differentiator instead of simply to improve efficiency.
Can Companies Find New Ways to Adopt AI?
As AI achieves its early majority, companies will need to find new ways of implementing AI to continue gaining advantages over their competitors. This can be a tall order, especially when you consider that over 90% of organizations have reported an AI project failure. Reasons for failure include technology that didn’t fit the bill, lack of staff experience, mismatched business cases, and simple lack of follow-through.
This report—and many other stories that talk about the failure rate of AI products—would seem to indicate that AI is hard to get right. This seems at odds with the idea that AI will feature prominently in most enterprises within the next three years—and it might bode ill for companies looking for novel AI use-cases.
On the other hand, the rapid maturity of AI products indicates that they’re becoming easier and easier to implement. By the time AI hits its projected saturation point in 2023, installing and using an AI solution will probably be easier in ways that we can only guess at—they may be as easy as implementing a SaaS solution is today. With that in mind, only those trying to find new AI use cases will likely experience elevated risks.
So, what will creative approaches to AI look like in the future?
- Create New Products
Instead of using AI to make existing products and processes better, companies can combine their existing data with AI technology to package entirely new products. Imagine a pharmaceutical company combining its existing biological research with AI analytics in order to identify candidates for new drugs, and you’ll get an idea of what’s possible.
- Find Best-In-Breed Solutions
Companies tend to be AI consumers as opposed to AI creators. In other words, more companies buy AI solutions from vendors rather than develop solutions in-house. When purchasing from a vendor, there’s always a chance of getting it wrong—finding a product that doesn’t work, isn’t a right fit, or isn’t well supported. Developing a mature purchasing model for AI can be as important as finding a new way to use it.
- Address AI Risks
AI can help companies achieve a large competitive advantage, but it’s not perfect. Companies are worried that their AI-powered systems lack transparency, contain algorithmic bias, and can be used to manipulate people’s thoughts and opinions unethically. As the technology matures, companies that can reasonably claim to have mitigated these issues will gain a favorability advantage with the public.
To summarize, companies that have already adopted AI—or who are planning on near-term adoption—can’t rest on their laurels. Currently, levels of investment in AI indicate that most enterprises will still be on a level playing field again. To maintain market dominance, incumbent AI adopters should already be thinking of how they’ll make their next moves with this technology.
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