The global Generative AI market size is expected to grow at a compound annual growth rate (CAGR) of 36.5%, reaching USD 109.37 billion by 2030.[1] In 2024, spending on Generative AI (Gen AI) is seeing rapid growth as companies continue to invest in this transformative technology. A BCG report states that high-growth companies are increasing their Generative AI investments by 30%.
But the real question is, are these significant investments in Generative AI justified? This article attempts to address this critical dilemma faced by businesses today.Â
As we approach 2030, Generative AI is set to transform the global economy, potentially adding value in trillions of dollars and likely to have a substantial impact across all industry sectors.[2] A survey conducted by BCG with more than 1,400 C-suite executives shows that GenAI is rapidly changing the way companies do business.[4] Hence, it becomes imperative to delve deeper into the potential business value of Generative AI. In this article, we will break down the numbers and examine how Generative AI can benefit businesses.
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The primary focus of Gen AI initiatives by organizations is summarized below:
Let’s explore the transformative power of Generative AI for businesses with some quick facts and figures:
Companies project payback within three months of deployment of Gen AI; in some cases, time to value is 3-6 months; while in a few cases, firms see results even in 2-8 weeks.[3]
According to BCG, 54% of business leaders expect GenAI to deliver significant cost savings by 2024, with many predicting reductions of over 10%; firms adopting Gen AI have witnessed substantial gains in productivity and topline growth due to automation and strategic implementation.[2] Gen AI can deliver productivity gains of 10%-20% or more across enterprises. [5]
A McKinsey report states that GenAI boosts sales efficiency by automating routine tasks and uncovering new customer segments, freeing sellers to focus on high-value activities like relationship-building and unlocking new revenue streams.[5]
Generative AI has the potential to revolutionize the entire customer operations function, improving the customer experience and agent productivity through digital self-service and enhancing and augmenting agent skills.[2]
McKinsey reports that generative AI boosts response rates by 40% and reduces costs by 25%, improving customer satisfaction through personalized engagement.[7]
 The marketing productivity alone due to gen AI could increase between 5 and 15 percent of total marketing spend, worth about $463 billion annually.[7]
As far as industries are concerned, a report by PwC states that Pharmaceuticals and life sciences, along with banking, media, and technology, are among the sectors with the greatest immediate opportunities for value creation.[8]
According to a PwC report, generative AI will impact all sectors, but in high-cost industries like retail and banking, efficiency is a key benefit. In contrast, sectors such as pharmaceuticals and media are expected to derive over 50% of their value from new revenue growth opportunities.[8]
Further, there are many applications of generative AI across modalities as depicted below:
The potential of Generative AI is limitless, driving innovation, efficiency, and growth across all sectors. However, it’s up to businesses to effectively leverage this technology to maximize its benefits. As companies leverage the capabilities of GenAI, they can unlock new opportunities, transform processes, and enhance customer experiences, ultimately driving significant value.
Want to tap into the transformative power of Generative AI? Let’s connect and explore how it can enhance your business’s efficiency and growth. Get in touch now!
References:
https://www.grandviewresearch.com/industry-analysis/generative-ai-market-report
https://www.bcg.com/publications/2024/from-potential-to-profit-with-genai
https://www.bcg.com/publications/2023/maximizing-the-potential-of-generative-ai
https://www.pmi.org/learning/thought-leadership/ai-impact/leading-ai-driven-business-transformation
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