AI Adoption: A Realistic View on Impact and Returns
The promises of AI continue to dazzle us, but as we approach earnings for some of the largest tech companies, what we need is clear: realistic expectations. While investment in generative AI technology soars, determining its real impact and potential returns is proving to be more elusive.
Wall Street continues to ride the wave of an AI-fueled rally, but the question that lingers is whether these investments will give a meaningful lift to businesses. AI technology, particularly text, image, and video-generating software like ChatGPT, has seen enormous financial support for its development and infrastructure. But will consumers and corporations see enough value to justify the investment?
Microsoft, in particular, has been under the spotlight. Their alliance with OpenAI and early adoption of AI tech into their software set a precedent. But is this enough to herald a return on investment? Not necessarily. Despite claims of AI contributing to a 6% growth on its Azure cloud platform, this translates to just over 1% of Microsoft's projected total revenue for the year, barely substantial in the grander scheme.
The uncertainty of AI's take-up is in stark contrast to the boom in tech infrastructure investment – a good instance being Nvidia, whose data-centre chips sales exploded to $47bn last year and are projected to double again this year. But these figures beg the critical question – when will we see the returns? “Be patient” is the common message echoed among tech companies, expressing the hope of seeing meaningful AI impact and returns by 2025.
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(Note: The article is derived from the original post on Financial Times)
