Generative artificial intelligence (AI) is expected to be a tool used to increase efficiency for businesses and technology vendors but also help consumers in a range of use cases. While early excitement over generative AI was high, actual implementation of planned initiatives may be rolling out slower than expected as concerns over security, accuracy and costs are rising.
As a result, generative AI spending may also be slowing, according to a new study from Lucidworks.
The study found only 58% of technology decision making companies plan to increase spending in 2024, a sharp decline from 93% that increased investments in 2023.
Concerns over security, accuracy and cost are forcing most businesses to slow down planned initiatives and to be more strategic about the balance between cost and benefit, Lucidworks said. Specifically, security worries have tripled, accuracy concerns have grown five times and transparency issues have quadrupled since Lucidworks’ study in 2023.
"While many manufacturers see the potential benefits of generative AI, challenges such as response accuracy and cost are causing them to take a more cautious approach,” said Mike Sinoway, CEO of Lucidworks. “This is reflected in spending plans, with significantly fewer planning to increase AI investments compared to last year. However, above-average reported cost benefits in 2024 could make them more bullish in the coming year. B2B companies and manufacturers have much to gain if they can balance cost and risk to improve efficiency, enhance the buyer experience, and reduce operational costs using generative AI.”
Other findings in the study include:
- 30% of vendors worry they are falling behind.
- Only one in five initiatives have been successfully deployed.
- Many initiatives are delayed in being deployed.
- Only 49% of Chinese vendors plan to increase AI spending this year, down from 100% in 2023.
- Nearly eight in 10 companies use commercial large language models (LLMs) and 21% have opted for open source only.
