AI Hype vs. Reality: The Hard Truth About Enterprise Readiness
‘Wall Street is becoming more sceptical of artificial-intelligence hype helping to power stocks’ – MarketWatch
I have started to see more negative headlines emerge on AI recently. The ecosystem of investors, company executive leadership, and founders are becoming sceptical of AI’s impact in the near term.
It’s amazing how innovation follows historical patterns like Gartner’s Hype cycle. We are clearly at or near the peak of the hype cycle and obeying Amara’s law, which states, “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.” When toothbrushes and toilet seats are sold with the promise of AI, and your grandma talks about the potential upside of Nvidia stock, you know we are already there.
AI is by no means like the Metaverse. On the contrary, I believe this qualifies as a key inflexion point and can be compared to the PC and internet revolution. But we are in the segment of the journey where the hysteria is going to give way to realism and the pain of massive consolidation, just like we saw in the dot-com era.
Organisations experimenting and starting their journey on enterprise AI readiness know that this will be a competitive edge in the long term. Still, they are now faced with tough investment choices on implementation. Organisations not only need to make infrastructure investments in LLMs and hardware but also realise that most of their organisation’s data plumbing is not AI-ready. The other big aspect of AI readiness is the lack of skilled AI talent and the whole task of tackling organisation culture for fast AI adoption. The productivity gains promised by AI will take time to bear fruit, which means that organisations need to make heavy upfront capital investments. With the cost of capital still high, AI enterprise readiness will not be easy to achieve in the short term.
Another realisation is that AI brings its own set of problems, such as Hallucinations, bias, and bad actors. This requires guardrails, organisation policies, training, and crisis readiness.
In a matter of years, AI integration in organisations’ software and workflows will become a hygiene factor rather than a competitive advantage. Hard prioritisation of investments will have to be made before organisations start seeing any return on their investment.
In the short run, the winners will be the AI-first companies that strategically plan and grow their business around AI infrastructure and processes. AI infrastructure vendors and consultancies are already seeing the upside of AI on their bottom line, but the rest of the world will take time to catch up.
If you would like to discuss enterprise readiness or use cases for AI in marketing and communications, feel free to connect and chat.
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