IBM finds CEOs racing ahead of their teams in pursuit of $7 trillion GenAI prize

Generative AI (GenAI) is expected to deliver a 7% rise in global GDP within 10 years, according to Goldman Sachs—worth broadly $7 trillion. Yet, according to IBM’s survey of CEOs, there’s a disconnect between the speed with which CEOs want to move and the ability of their enterprise to take advantage of GenAI. Regardless of your position in your organization, if you want to get in on the $7 trillion GenAI opportunity (and you should), teams must work together to fix this disconnect for the technology to reach its full potential.

IBM’s CEO survey found 74% of CEOs say their teams have the knowledge and skills to incorporate new technologies such as GenAI. But among senior execs beyond the CEO’s office, there are deeper concerns. Only 30% think their enterprise is ready to adopt GenAI responsibly, with worries centering around governance and security. Only 29% believe they have the in-house expertise to adopt GenAI.

50% of CEOs already integrate GenAI in products and services

Despite the disconnect between CEOs and senior teams about readiness and expertise, 50% of CEOs say their organizations are busily integrating GenAI into products and services in use cases such as summarizing reports, creating content, and speeding up code generation. Almost as many, 43%, claim they also use it to inform strategic decisions. For all the rush to find value, many are proceeding without clear policies. The same IBM survey showed it will be 2024 before even 74% of CEOs issue organization-wide guidance on GenAI usage. Enterprises could be setting themselves up for GenAI failure before they even understand its true potential.

There should be little surprise that amid the GenAI gold rush, the haste to proceed may lead some down tunnels where value is unproven and risks ill-considered. In line with HFS Research’s approach to The Generative Enterprise™, IBM believes organizations must change how they work to take full advantage of AI, identifying change management as a critical part of delivering the enterprise-wide impact of GenAI. IBM lists seven major GenAI impacts the C-suite should be considering:

• New and differentiating experiences, products, and services
• Step-change gains in efficiency and effectiveness, augmenting human talent
• New technologies, capabilities, and tools
• New organization skills and ways of working
• New partnerships and collaborations
• Legal, regulatory, and compliance issues
• New frameworks to ensure ethical, trustworthy, and non-biased outcomes

Hype may make GenAI sound like a cure-all, but success is far from guaranteed

IBM is already delivering against many of the seven impacts, telling its European Analyst event in London on June 12–13 that it is already working with 100 clients on GenAI projects, and it has established a global cohort of 1,000 skilled GenAI consultants in its center of excellence. Its experience with an active global AI client base of 1,250 has provided 21,000 consultants already skilled in AI; IBM is upskilling this experienced consultant base for GenAI. IBM Consulting employs around 160,000 in total.

Enterprise leaders should be cautioned: While the hype may make it feel like GenAI is the rapid cure-all to everything from staff shortages to blockages in your value innovation pipeline, IBM revealed that even with its AI heritage, the average AI project has just a 70% chance of success. The industry average is just 54%. Given the comparative lack of experience with GenAI across the industry, it is reasonable to assume the chance of success with GenAI is slimmer still. We are hearing that because budgets are still tight in this tough economic climate, leaders are focusing GenAI on improving known business processes rather than exploring net-new value potential, perhaps a consequence of wasting dollars on metaverse and blockchain experiments in recent years.

The Bottom Line: CEOs must listen to their teams’ concerns. Winning big with GenAI requires a holistic approach.

CEOs are right to target the benefits of GenAI. At 7% of GDP, the opportunity dwarfs the $1 trillion market identified for the metaverse. But CEOs must listen to the concerns of their teams and work with partners to access those benefits. It will take a broad approach where they consider the role of GenAI in every process and way of working and address governance and compliance issues early. The opportunity to win with the Generative Enterprise is clear, but too much haste could make the percentage of AI project failures go through the roof.

• See also: Phil Fersht and Saurabh Gupta on how IBM Watsonx can become the beating heart of the Generative Enterprise.
• Coming soon: HFS Research is conducting the first-ever research into how service providers are supporting the arrival of the Generative Enterprise.