Ninety Percent of CEOs Are Waiting for GenAI to Move Past the Hype

Despite the for generative artificial intelligence to transform how busineses function, leaders are struggling to convert hype into reality, according to a new report by Boston Consulting Group (BCG).

The firm found that 66 percent of business executives are ambivalent or outright dissatisfied with their organizations' progress on AI and genAI so far, citing three primary reasons for their dissatisfaction: a lack of talent and skills (62 percent), an unclear AI and genAI roadmap and investment priorities (47 percent), and absence of strategy regarding responsible AI and genAI (42 percent).

But that is expected to change in 2024, according to the research. For example, 71 percent of executives said they plan to increase tech investments in 2024—an 11-point jump from 2023, and even more (85 percent) plan to increase their spending on AI and genAI. Additionally, 54 percent of leaders already expect AI to provide cost savings this year, primarily through productivity gains in operations, customer service, and IT.

"This is the year to turn genAI's promise into tangible business success," said Christoph Schweizer, BCG's CEO, in a statement. "Almost every CEO, myself included, has experienced a steep learning curve with genAI. When technology is changing so quickly, it can be tempting to wait and see where things land. But with genAI, the early winners are experimenting, learning, and building at scale."

Although a small percentage of companies are already reaping the rewards of AI and genAI, others are either playing catch up or standing on the sidelines. More than 60 percent of executives said their firms are still waiting to see how AI-specific regulations develop, and just 6 percent of companies have trained more than 25 percent of their people on GenAI tools so far.

According to the report, winning companies acknowledge genAI's permanence and recognize its potential for both enhanced productivity and top-line growth. It outlines several characteristics that set the winners apart from observers, including the following:

• Winners invest for productivity and top-line growth. Organizations that plan to invest more than $50 million in AI and genAI this year are 1.3 times more likely to see cost savings in 2024 and 1.5 times more likely to achieve more than 10 percent in cost savings.
• Winners are systematically upskilling. Twenty-one percent of organizations spending more than $50 million on AI and genAI this year have already trained more than a quarter of their people.
• Winners are vigilant about GenAI cost of use. Cost of use, which has serious long-term implications, is not commanding the attention it should. Only 19 percent consider cost the top concern when choosing AI and genAI solutions.
• Winners build intentional relationships. Only 3 percent of executives consider pre-existing partnerships a priority when looking for AI solutions.
• Winners implement responsible AI principles Of companies investing more than $50 million in AI in 2024, 27 percent put the CEO in charge of their responsible AI strategy vs. 14 percent overall.

"Generative AI is radically reshaping businesses. Leading companies on the genAI front are planning to realize up to $1 billion in productivity gains, and they are already looking at ways to reinvest into new business models and growth," said Sylvain Duranton, global leader of BCG X and co-author of the report, in a statement. "This is a second chance for companies who missed the first AI wave."

"To unlock genAI's full potential, executives should deploy it to improve efficiency of everyday tasks, reshape critical functions, and invent new business models," Schweizer said. "Doing so can increase productivity by up to 20 percent, enhance efficiency and effectiveness by up to 50 percent, boost revenue, and create long-term competitive advantage."