Generative AI and its implications for business

Introduction

In a world filled with conversations around Generative Artificial Intelligence (Gen AI), this could be considered just another discourse – but it’s not. Gen AI is everywhere, in every possible realm, from conferences to coffee shops, CXOs to co-workers, journals to even TikTok content. But this article attempts to decipher the true impact of Generative AI. Is this a bubble where we forget it next year, or is it here to stay? What is the causal relationship and need of GenAI regarding tangible and intangible business results?

But first, what is Generative AI?

Gen AI describes algorithms (such as ChatGPT, Github Copilot, and Bard) that can be used to create new content, including audio, code, images, text, simulations, and videos. In a time-is-money world, Gen AI has revolutionized how imagination and creativity can be accelerated; with simple text-based prompts, we can obtain machine-generated content, images, and more.

This is generated by the scores of data that Gen AI platforms have analyzed and pre-trained their algorithms on. It truly has the potential to change how businesses function, and its impact is unraveling in various industries.

Impact on business

According to Goldman Sachs, Gen AI could raise the global GDP (Gross Domestic Product) by 7% ¹. That is an astounding number to fathom, as it suggests that GenAI has the potential to yield more significant impacts across diverse sectors than mere intuitive text generation. This surge in economic output could lead to heightened employment opportunities, increased consumer spending, and a boost in infrastructure development.

Furthermore, the additional financial resources generated could be channeled into addressing societal challenges, funding education and healthcare initiatives, and fostering overall prosperity. The ripple effects of this economic growth extend to improved living standards, technological advancements, and a more robust global economy overall. To further deep dive into the various business impacts, we could broadly categorize the implications for business into three categories:

• Productivity: The ability to generate content and more with just a few text prompts has excellent potential for improving productivity in multiple ways. A recent study by the National Bureau of Economic Research showed that agents using Gen AI to resolve customer issues resolved more issues per hour (an increase of 13.8 percent ² ). Furthermore, research ³ by GitHub on their Gen AI tool, GitHub Copilot, noted that 88% of their respondents perceived they were productive using GenAI. Another study stated an average improvement of 3.5 hours in code development cycle time. The impact is still just trickling in and can be expected only to grow. According to a study by Goldman Sachs, Gen AI is expected to impact close to 300 million jobs ⁴ ; as much as this has caught the newly joined workforce off guard, it has also created many new job paradigms through Prompt engineering, such as AI Writers and Artists. Larger conglomerates such as Coca-Cola have even hired heads of businesses for Gen AI.
• Personalization: GenAI is a vital tool for personalization. It helps tailor the content and services that businesses provide customers; businesses can create an engagement mechanism that accelerates their customers to obtain the critical outcome they seek from their products or services.

  For example, a company can customize the messaging of a product basis the specific interests of each customer; assuming the product is a phone, some customers may be interested in the battery life, some in the processing power and gaming, and some in display/screen size. Businesses can efficiently use customer behavior data to tailor messaging and even the experience of purchasing the product. But this is not somewhere in the future: E-commerce giant Amazon and content powerhouse Netflix use generative AI to enhance customer consumption with tailored suggestions basis customers’ interests and behavior.

• Democratization of creativity: Marketing teams leverage generative AI to create content for promotional emails, campaign briefs, and more. By harnessing the capabilities of generative AI, marketing teams can enhance their efficiency and responsiveness, ensuring a quicker turnaround in the creation of compelling and personalized promotional materials. This reduces the workload on creative teams and opens up new possibilities for experimentation and iteration in advertising strategies.

Potentials and risks

Gen AI also comes with a range of risks. The most obvious ones are privacy, the ability to create malicious content, disinformation, and hate speech. Many businesses are careful about protecting their data and customers’ privacy when engaging with large language models used in GenAI. Also, Gen AI is only as good as the data it is trained on – so misleading data can confuse the technology. Hallucination is a phenomenon where AI systems perceive non-existent facts (or ideas imperceivable to human observers), thus creating results that are not accurate; this occurs in3 to 27% of the interactions ⁵.

Bottomline

Beyond the risks, it is inevitable to feel optimistic about the technology. Gen AI is here to stay and is already impacting our everyday work. Its tangible and intangible impacts burgeoning every single day, and the possibilities seem limitless.

However, one critical need at the zenith of all business outcomes that Gen AI lends to is accelerated decision-making. Gone is the era of legacy business systems and business intelligence. Decision intelligence is the way forward and will define how businesses function in the future.

If you want to know more about how Fosfor leverages Gen AI to cater to your decision intelligence needs, sign up for a quick demo with our experts.