Companies are pouring money into artificial intelligence. But the more money they pour into it, the louder the rumors of a possible bubble grow.
A survey conducted by KPMG reveals this dilemma that many business leaders are caught in. In a survey of 100 chief executives conducted between late January and mid-February, a quarter of them believed that a bubble in artificial intelligence had already formed. Yet most of them are still planning to increase their spending in this area.
The answer is simple. For many of these chief executives, the bigger fear is that of being left behind.
Close to 80 percent of those surveyed claimed that they would invest at least five percent of their capital budgets in artificial intelligence in the coming year. Such a level of investment is a reflection of how important artificial intelligence is to business strategies.
The first step in many companies has been workforce training. Six out of ten CEOs reported that their companies are investing in training programs to enable the workforce to learn how to use AI technology. This is to ensure the workforce has the capabilities to work with AI technology and not replace the workforce with AI technology.
However, the impact on jobs remains a concern for many companies. One in five CEOs reported that their companies will be laying off employees in the coming year. Only nine percent of the CEOs reported the layoffs as being directly related to the implementation of AI technology.
The AI-Cybersecurity Paradox, Navigating Innovation, Quantum Risks, and the Talent Gap
The nine percent might be considered low, considering the impact on the technology industry. Companies such as Meta, Amazon, Block, Inc., Pinterest, and Autodesk have already laid off employees, and their companies are investing more in AI technology.
Aside from this, there are also issues concerning security, which are influencing spending. Adoption of AI is causing new risks to businesses. This is because they are able to deal with large volumes of data and are often integrated into already existing systems. This is causing new issues concerning data security.
Two-thirds of the CEOs polled reported that these issues are causing them to increase their spending on cybersecurity measures as they spend on AI.
Another risk is causing issues concerning CEOs as well. This is because of the impact of quantum computing in the future.
Six out of ten CEOs reported being worried about the fact that future quantum computing systems have the capability to break current encryption methods.
The survey also found that there was a shortage of cybersecurity talent. Two-thirds of the CEOs were not sure if they had the right experts in place. This means that many companies plan to train existing staff instead of recruiting new talent.
Despite all of these issues, most CEOs feel that AI will play a role in shaping the next decade of business.
Short-Term Hype vs. Long-Term Transformation
Around three-quarters of the CEOs polled indicated that generative AI may have been overhyped in the past year. On the flip side, CEOs feel that its impact may be underestimated. This means that the current excitement may not last, but it is likely to change industries in the future.
Some of the CEOs were concerned about how AI would impact learning in the workplace. Around one in three CEOs were concerned that if AI is heavily used in business, younger people may not have the opportunity to learn through trial and error.
Trial and error have always played a role in learning in the workplace. This means that if AI is used for decision-making in business, people may not have the opportunity to learn through mistakes. This may impact how future generations of CEOs will learn through mistakes.
It also asked questions about broader economic prospects. Most CEOs retain their optimism when it comes to their individual industries. Eighty-six percent of them say that they feel confident with regards to growth in their industries.
Their outlook for the overall economy is less rosy. Only 55 percent of them say that they feel confident with regards to overall economic growth in the United States. Only 53 percent feel confident with regards to global growth.
Another survey of thousands of business executives offers context for these latest figures. More than half of them confessed that they have not seen financial returns for investments in AI.
The rationale is obvious: even if the reward is not guaranteed, few business leaders wish to miss the next big technological revolution. AI may be overhyped in the short term. Still, for most business leaders, not moving at all is the greater risk.
