JPM with the note.
Despite the significant automation, engagement, and other opportunities, real widespread adoption of genAI remains years away. Early enthusiasts have passed the torch to the innovators in the typical adoption cycle, but the mainstream market has serious barriers to overcome to really capitalize on the opportunity that genAI presents.
Business leaders’ first questions for their technology advisors upon interacting with genAI tools are (1) how can we use it in our organization and (2) what do we need to do to get it rolled out. Each question is critical. Jack Dorsey, Co-Founder and Block Head at Block, encouraged companies to approach investments in genAI from a use case perspective rather than a technology perspective in his comments at our 2023 TMC Conference in Boston, suggesting that the hype around the technology could lead companies to spend aimlessly and thus realize inferior returns. IT Services companies can help operating companies target their genAI spending towards the areas with the highest returns. ACN [Accenture] cited on its F3Q23 earnings call that the company completed 100 genAI projects amounting to ~$100 million in sales in the prior four months; while this early traction demonstrates strong positioning for ACN and reflects the company’s robust client relationships, that $100M is still a tiny figure on ACN’s $60B+ revenue base, and the bulk of those engagements likely represent preliminary, exploratory projects as clients begin to figure out how they want to use genAI. These exploratory engagements can include conversations around what kind of model to use, how to train it, quantifying the lift required to prepare the training data, etc.
