71% of UK and US C-Suite executives have already adopted AI

With Artificial Intelligence possibly constituting a $5 trillion industry by 2025, a new report has warned firms that delaying plans to tap into the technology could see them miss out on a change “bigger than splitting the atom.” With a hugely complex process of implementation, however, firms will have a number of key challenges to face before they can leverage the true benefits of AI.

Artificial Intelligence (AI) is one of the most hyped technologies around, touted to disrupt industries and entire ways of working. As many as 70% of companies are forecast to adopt at least one form of AI by 2030, with the technology potentially contributing up to 1.2% additional annual GDP growth for the next decade, while early adopters will experience the largest benefits of the new innovations on offer.

At present, the true extent of the change which AI could be on the verge of realising is unclear, thanks to significant regional and organisational problems – including skill gaps – which adopters will need to address in order to see the economic potential realised in its entirety. However, once that occurs, AI’s effects are expected to reach beyond products and devices – transforming job roles and creating new industries, while spawning new challengers that will threaten long-established businesses which fail to plan adequately for the new world of artificial intelligence.

According to a new study from OC&C Strategy Consultants, however, British businesses are well on their way to realising the corporate order of tomorrow. A poll of 400 C-Suite executives and thought leaders in the US and UK has revealed that 71% of C-Suite executives in both nations have already embraced AI, adopting it into their business following a huge year of investment in the technology in 2018.

Companies in the UK and US invested $219 billion in AI last year, while the annual global spend is expected to rise to $400 billion by 2025, accounting for 10% of all IT spending. In that case, the gold rush for AI does not look likely to end soon, either, with 67% of respondents telling researchers they planned to develop or purchase AI solutions in the next 12 months. More than half of those investing in AI will sink at least £5 million into their efforts, while almost one in ten will spend more than £12.5 million. Only 6% of business leaders spending on AI suggested they felt less than £1 million would suffice, indicating just how important executives think AI is for their future profit margins.

James Walker, Partner at OC&C, said of AI’s potential, “We believe AI will become one of the biggest technologies in human history; as one of our interviewees put it, ‘bigger than the internet, bigger than splitting the atom’. There are obvious standout industries that AI will dominate: advanced robotics powered by AI will be a $5 trillion industry by 2025, in addition to other digital service industries such as programmatic media buying becoming 100% automated by the same time.”

Respondents not currently investing, but planning to do so in the coming year, said that they expected to create their AI solutions via a range of methods. The most common of these was to develop solutions with a mixture of internal and external input – at 35% – while only a minority of 14% expected to perform the whole process internally. At the same time, more than a quarter will see solutions developed by external suppliers, but managed internally, with a collaborative approach seemingly making more sense to many firms where AI expertise may still be a distant concept. Consultants and outsourcers are likely to enjoy quite a windfall from the process of AI solutions development, then.

Not all firms were sold on the prospect of AI, however. Of the firms with no AI roadmap in place, 33% do not intend to invest in the technology this year. While a third of these firms said this was because they were planning to build foundational analytics capabilities first, which will likely provide a platform from which to pursue AI in the future, a number simply said they did not have enough data to make AI worthwhile, or admitted they did not have the right skills in their talent pool. Another 13% said that they did not believe AI was cost-effective in their sector, while 11% suggested that they were waiting for other firms to take a leap of faith, and would be convinced by AI if they succeeded.

While it might be understandable that companies would sit back and let competitors take financial risks – implementing AI measures once it is thought of as ‘safe’ – this tactic could see them lag permanently behind their rivals. McKinsey & Company recently suggested that leaders on AI adoption could expect cumulative change of as much as 122%, compared to just 10% among followers, or -23% among non-adopters.

Remarking on OC&C’s findings, James Walker said, “Our research reveals the current adopters of AI are outperforming those yet to invest in the technology. Therefore, it’s essential that businesses find how best to deploy AI and use it as a transformative catalyst. By working out the pivot points where AI can make the biggest impact, businesses can plan for tomorrow and make sure they’re not left behind by competitors.”