The future of generative AI: Determining with numbers whether it’s a bubble
Haebom
According to a McKinsey report, Generative AI is growing rapidly and is expected to add up to $4.4 trillion in annual value to the global economy. This technology impacts a wide range of industries and occupations, and is expected to have especially significant effects in marketing and software development.
Beyond the McKinsey report, recent Deloitte papers and leading market analyses both domestically and abroad suggest that the generative AI market differs from prior trends like cryptocurrencies or the metaverse, in that it delivers real utility, not just buzz. In this article, I'll explore the future of generative AI based on reports and charts published by McKinsey and various other firms.
Questions worth considering before diving in
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In which fields will technology advance the fastest?
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Which jobs will be most impacted?
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Which industries will stand to gain the most?
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Which activities will add the most value to organizations?
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How do workers feel about this technology?
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What safeguards are needed to ensure responsible use of this technology?
The era of generative AI jump-started by ChatGPT
Generative AI can do everything from powering chatbots like ChatGPT to creating various forms of content, and unlike previous AI, it can perform a wide range of tasks. This article uses charts to show how businesses can use generative AI, as well as the risks and management strategies to consider when adopting the technology. The chart provides a timeline of how, after ChatGPT’s launch, large language models gained attention and the discourse moved toward generative AI.
Is generative AI already reaching a technological singularity?
We’re getting closer and closer to human-level performance. For most of the technical abilities shown in this chart, generative AI will reach the median human level a decade earlier by the end of this period. And by 2040, its capabilities are expected to rival the top 25% of people performing these tasks. This is 40 years ahead of what experts once predicted.
Knowledge workers are also now open to automation.
While previous waves of automation mainly impacted manual or physical work, the AI generation is expected to have the greatest influence on knowledge work, especially in activities related to decision-making and collaboration. Experts in fields like education, law, technology, and the arts will likely see parts of their work being completed faster than before. This is made possible by generative AI’s ability to predict and use natural language patterns dynamically.
Specialized small-scale apps, rather than super-apps, are rising again.
Apps tailored to specific use cases continue to multiply. Next-gen AI tools can already generate most text, images, video, audio, and coded content. Companies are building applications to serve every one of these needs. Soon, apps targeting certain industries and functions are expected to add value in the following ways:
The most remarkable feature of generative AI is its fusion with other disciplines.
In the upcoming AI era, how different business functions are combined and prioritized, along with industry sales volumes, will all be shaped by a variety of factors. Marketing and sales, in particular, are expected to benefit the most from AI. But for high-tech and finance, rushing into AI adoption could actually pose risks.
Industry-specific considerations for adopting artificial intelligence
This chart features a spotlight section showing in detail how to identify the highest-value use cases in banking (finance), life sciences, retail, and consumer goods. This framework could be a helpful reference for evaluating your own industry.
The market has barely begun. You’re ahead of the curve.
Despite the launch of generative AI, most organizations haven’t started using it. When marketing and sales leaders were asked how often their organization should use generative AI or machine learning in business activities, 90% said it should be at least 'often.' Given how we’ve seen marketing and sales are likely to be the most impacted, this isn’t surprising. Still, 60% said their organization rarely or never does it.
Marketers are figuring out how to ride the new paradigm.
Marketing and sales leaders are particularly excited about three main use cases. Our research shows they expect at least a moderate impact from each proposed AI application, with the most enthusiasm reserved for lead identification, marketing optimization, and personalized outreach.
AI and developers make quite a strong partnership.
Software engineering—a major source of value across industries—can now be much more efficient. When 40 McKinsey developers tested generative AI tools, we saw dramatic speed gains in developer tasks: Documenting code features for maintainability could be done in half the time, new code could be written in nearly half the time, and existing code (refactoring) could be optimized in two-thirds of the time.
AI makes developers happier.
AI support can boost developer happiness. Our research found that providing developers with the tools they need to be most productive significantly improved their experience, which in turn helps companies retain top talent. Developers using generative AI-based tools were more than twice as likely to report overall happiness, a sense of achievement, and being in a state of flow.
More and more people will be using AI tools from now on.
Workers are becoming much more open to using generative AI tools. According to a new McKinsey survey, the majority of workers across industries and regions have used AI tools at least once, whether at work or outside of work. This is a remarkably rapid rate of adoption, in less than a year. One surprising finding: baby boomers report using generative AI tools for their work even more than millennials do.
Organizations still need greater AI literacy
As organizations start to set AI-related goals, workers are calling for more colleagues who can read, understand, and write advanced AI-related texts. General and applied AI tools are starting to deliver value to early adopters, but there’s still a large gap between the demand and supply of skilled talent. To stay competitive in the talent market, organizations need to develop top-tier talent management skills and offer a rewarding work experience for those who can read and write AI-focused content.
What should organizations watch out for when introducing AI tools?
Organizations need to move carefully. The promise of AI is awe-inspiring for many, but like any new technology, it comes with potential risks. For example, AI can produce content that is biased, inaccurate, or pulled unlawfully from copyrighted sources. Before rolling out AI tools in the workplace, organizations should weigh the reputational and legal risks they may be exposed to. One simple way to reduce risk is to have an actual human review all generative AI output before it’s published or used.
AI could ultimately increase global GDP
McKinsey has found that generative AI could significantly boost labor productivity across the entire economy. But for these gains to be realized, workers whose jobs are impacted would have to shift into other activities that at least match their 2022 productivity levels. If workers are supported to learn new skills—and in some cases, change careers—rapid global GDP growth could create a more sustainable and inclusive world.
Generative AI represents just a small slice of AI’s overall value potential.
Gen AI is a significant advance, but traditional advanced analytics and machine learning still play a major role in optimizing tasks and continuing to open new applications in many fields.
Organizations going through digital and AI transformation should keep an eye on generative AI, but that doesn’t mean ignoring other AI tools. Just because they’re not trending doesn’t mean they can’t help boost productivity and ultimately deliver value. In other words, quickly finding or building AI tools best suited to your organization is smart.
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I post articles related to IT 💻, economy 💰, and humanities 🎭.
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haebom@kakao.com
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I post articles related to IT 💻, economy 💰, and humanities 🎭.
If you are curious about my thoughts, perspectives or interests, please subscribe.
haebom@kakao.com