AI Poised to Drive Digital Disruption, Report Finds
Artificial intelligence has long been a favorite topic among futurists, science fiction writers and Ted Talk lecturers. Some pundits expound the technology’s boundless potential, while others call it an existential threat to human civilization, as Business Insider reports.
In reality, AI is getting a lot of practical work done. In their report, “Artificial Intelligence, The Next Digital Frontier?,” McKinsey finds that the technology is finally beginning to deliver significant ROI for early adopters around the world.
The factors driving a new era of development for artificial intelligence include increasingly sophisticated algorithms and models, as well as an increase in computing power and data. The Internet of Things plays a major role here, utilizing everything from machine sensors to web browsers to generate vast quantities of digital information every day.
Early Adopters Leading the Way
According to McKinsey, numerous tech-forward enterprises are investing internally in cognitive technologies — including robotics, speech recognition, virtual agents and machine learning.
In the automotive industry, BMW, Tesla and Toyota are leading the pack in robotics and machine learning investments in driverless vehicles. Toyota plans to invest $1 billion in a new research institute devoted to advanced robotics and autonomous cars, McKinsey notes.
Similarly, IBM is revamping its Global Technology Services division to rely more heavily on AI. This new capability powered by the company’s Watson cognitive computing platform will enable IBM customers to predict problems before they happen and automatically take corrective steps, Bart van den Daele, general manager of IBM Global Technology Services in Europe, told Bloomberg.
Doubts in the C-Suite
McKinsey surveyed more than 3,000 senior executives on the use of artificial intelligence, their firms’ prospects for further deployment and the technology’s impact on markets, governments and people. Only 20 percent of executives reported that they currently AI at scale or in a core part of their business, and many are uncertain of the technology’s business case or return on investment. A McKinsey review of more than 160 use cases revealed that companies deployed artificial intelligence commercially in only 12 percent of these cases.
Despite executives’ concerns, AI is advancing in a big way. A recent IDC study forecasts that worldwide revenues for cognitive technologies will soar from nearly $8 billion in 2016 to more than $47 billion in 2020, InformationWeek reports. This growth is due to early adopters, particularly technology giants, steamrolling ahead.
“After decades of hopes and disappointment, artificial intelligence is back and could be set to drive profound changes in the global economy,” the McKinsey study concludes. “Investment has been growing fast since 2013, with tech giants making huge plays on AI technology development and deploying it across their businesses. We are already seeing examples of real-life business benefits for early-adopting firms.”