Service providers invest billions and train thousands for the GenAI gold rush

Generative AI’s (GenAI) promise of a $7 trillion prize has prompted a gold rush among service providers as they hurry to organize and claim a piece of the action from a ready queue of enterprise buyers.

IBM data suggests that as many as half of CEOs are already placing GenAI bets. We see initial traction with enterprise buyers demanding help shaping policies, identifying opportunities, analyzing and planning process updates, and building initial pilots and proofs of concept.

HFS is currently undertaking our first-ever Generative Enterprise™ services study, diving deep into various service providers’ offerings and claims.

New practices, platforms, and partnerships conjured up in a matter of months

In a matter of months, leading systems integrators and consultancies have conjured up new practices, divisions, platforms, and partnerships. They are scaling up, investing billions, training thousands of people, and recruiting thousands more.

Exhibit 1 shows nearly 70% of those vendor announcements can be categorized as ecosystem development, new offerings, and talent scaling and training. Google claims the majority of hyperscaler partnerships announced to date.

Exhibit 1: There’s been a gold rush of announcements from major industry players stemming from their land grab in the new world of GenAI

Sample: April–July 2023; HFS analysis of approximately 50 major GenAI announcements from leading IT and business service providers
Source: HFS Research, 2023

Google, AWS, and Microsoft alliances enable rapid expansion in capabilities

Leading IT and business services firms made multiple announcements between mid-April and mid-July 2023 around their investments and commitment to generative AI (Gen AI). We summarized them in Exhibit 2. Accenture is leading this generative AI gold rush with $3 billion in investments, accounting for 20% of the recent announcements HFS tracked. IBM, which recently launched Watsonx, accounts for 10% of the recent announcements and is in second position. Practically every large service provider has made market announcements over the last few months.

The primary focus for leading IT and business service providers as GenAI picks up steam has been on expanding their ecosystem, especially with hyperscalers. More than 60% of the hyperscaler partnership announcements have been with Google. Of the big three hyperscalers, Google plays in all GenAI ecosystem layers (apps, models, and infrastructure).

Exhibit 2: A gold rush of announcements has come from service providers in a few short months

Thousands more are set to qualify to help the enterprise journey

If suppliers keep their announcements’ promises, enterprises can expect to find hundreds of thousands of available qualified GenAI experts within a year, alongside a range of platforms and accelerators, to help enterprise leaders get a head start in this new world.

However, here’s a word of caution. It remains to be seen how much of this investment is net-new. In many instances, firms are likely corralling and relabeling practices to respond to a salivating market, just as we saw with the explosion in metaverse practices. In many cases, those newly formed metaverse practices were combinations of capabilities service providers already had, such as blockchain and digital design.

The Bottom Line: When your head is spinning from the impact of GenAI and an explosion of choice, turn to partners you can trust to deliver—and to challenge.

As if your head wasn’t already in a spin from the potential impact of GenAI, now you have an exploding roster of potential partners expanding their offerings by the day and all vying for your investment. It’s time to look beyond the marketing hype and work with those you trust and that have served you well, but they must also be ready to challenge your thinking to help you find your way to the new world of The Generative Enterprise™.