The excitement surrounding artificial intelligence (AI) that drove the U.S. stock-market rally last year is expected to lead to tangible real-world applications in 2024. Deutsche Bank analysts believe that the potential uses of this technology will expand to a broader market.
A Pivotal Year for Generative AI
Deutsche Bank research analysts Adrian Cox and Galina Pozdnyakova state that 2024 will be a pivotal year for generative AI. They predict that it will move beyond experimentation and begin its implementation phase, separating winners from losers in the industry.
A Frenzy of Excitement
The release of generative AI products to the general public last year generated an overwhelming frenzy of excitement. It quickly became the buzzword in the tech world, captivating U.S. enterprises.
Hyped During Earnings Calls
Companies listed on the Russell 3000 index RUA, representing the largest publicly traded U.S. firms, could not stop hyping generative AI during their quarterly earnings calls. According to data from Deutsche Bank, mentions of generative AI-related topics surged from "virtually none" in 2022 to nearly 1,000 in the first quarter of 2023. The numbers skyrocketed further to almost 3,500 mentions in the third quarter of that year.
Decline in Hype
However, Deutsche Bank analysts observed a decline in corporate mentions of AI topics during the fourth quarter of 2023. It appears that companies are shifting their focus from the hype towards practical and real-world applications of AI instead of pursuing lofty aspirations.
Looking Ahead to 2024
Deutsche Bank analysts argue that productivity-enhancing tools integrated into existing software will be the first accessible use case of generative AI. They highlight Microsoft's MSFT, +0.28% 365 Copilot chatbot as an example. The chatbot, which was introduced to large-enterprise customers in November, assists with analyzing, charting, and editing Office 365 documents, as well as keeping up with meetings and messages.
In conclusion, as we move closer to 2024, the potential of artificial intelligence continues to expand. While the initial excitement may have settled, the focus has shifted towards tangible and practical uses of AI. The integration of generative AI into existing software tools is set to improve productivity and drive advancements in various industries.
Microsoft and Alphabet Introduce AI Tools for Sales and Service
Microsoft and Alphabet have recently announced the launch of their respective AI tools aimed at enhancing productivity. Microsoft is set to release Copilot for Sales and Copilot for Service offerings, while Alphabet is rolling out Duet AI for Google Workspace Enterprise.
According to experts, the implementation of these AI tools will take time, but they are expected to become widely adopted in various workflows. Deutsche Bank analysts anticipate a gradual adoption, comparing it to an "s-curve trajectory" rather than a sudden massive surge.
The introduction of AI tools like ChatGPT is also significant as it will bring about the collision of AI and democracy. This development raises concerns about the potential impact of disinformation during elections worldwide. Analysts predict that generative AI, which allows for the mass generation of content, may lead to a surge in personalized advertising, targeted disinformation, ultra-realistic deep fakes, and a general dilution of accurate information.
The analysts assert that regulation, or lack thereof, on generative AI will have far-reaching consequences. This pivotal moment calls for careful consideration as the decision made now will create a lasting legacy.
In other news, U.S. stocks experienced a decline in trading on Tuesday following a rise in the yield on the 10-year Treasury. The S&P 500 was down 0.6%, the Dow Jones Industrial Average decreased by 0.9%, and the Nasdaq Composite recorded a slump of 0.5%.
According to a study, AI is projected to have a substantial $1 trillion impact on the U.S. economy over the next 10 years.
- AI-powered misinformation is the world's biggest short-term threat, Davos report says
- AI will have a $1 trillion impact on U.S. economy over next 10 years, study finds
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