The market impact of Generative AI (GenAI) has been undeniable. But as the hype begins to quieten, its success as a defining technology of modern times will be dependent on its application in corporate products and operations.
Recent research by BNP Paribas Exane, identified close to 200 real-world examples across 28 sectors, which point towards rapid and broad adoption, supporting a bullish view on the future of GenAI.
GenAI’s waves of disruption
Analysts also predicted further waves of disruption amidst a whole host of technological drivers as GenAI becomes more widespread. The first wave, which is still ongoing, involves software companies embedding GenAI capabilities into existing productivity tools such as Adobe Firefly, Microsoft Co-Pilot and Shopify Magic.
In the second wave, analysts believe corporates will begin leveraging the power of Large Language Models (LLMs) and corporate data to create company-specific GenAI applications. And finally, the third wave will see an explosion of new services, where innovators create their own versions of Co-Pilot which may even replace many existing services.
Technology firms are undoubtedly leading the discussion on GenAI, but the breadth and depth of interest points towards a rapid diffusion through the economy.
Stuart Pearson, Head of Thematic Research, BNP Paribas Exane
Sectors to watch
In general, the discussion around GenAI has primarily focused on software, IT services and hardware providers, however analysts expect this to change over 2024 and into 2025. They identify the following as potential early adopters of GenAI technology:
Financial services
Banks are moving quickly to explore the potential for GenAI technology to create cost efficiencies. Improving customer services is currently a main area for investment as is automating client interactions.
Healthcare
GenAI has already generated plenty of media excitement regarding its potential to transform the healthcare space. In the pharmaceutical sector the long-term impact of GenAI could change the way companies develop and bring-to-market new drugs and treatments.
It could also improve efficiency across the value chain, by improving the speed of drug discovery, execution on clinical trials and manufacturing efficiencies. However, in a complex and heavily regulated industry, this will not be easy and will take time to implement.
Retail
Retail is emerging as an early adopter of GenAI – particularly in travel retail – as start ups emerge to disrupt existing market leaders. Early focus has mainly been on enhancing consumers’ digital experiences, including the development of GenAI-powered tools to help customers with product suggestions, designs and sizing.
The long-term potential of GenAI remains if anything under-hyped. Although the potential for GenAI is more heavily studied in the technology and consumer-cyclical spaces, there are examples to be found in almost every sector.
Stefan Slowinski, Head of Software Research, BNP Paribas Exane
GenAI is here to stay
The hype around GenAI may have appeared to have died down, but as more companies take time to explore what is possible with the technology, BNP Paribas Exane analysts believe there will again be an upward trend. Furthermore, corporate investment plans suggest more broadly that AI is a top priority for management teams in 2024.
An Accenture study of over 2,000 C-Suite executives across 13 countries showed that 74% of all organisations plan to increase spending on data and AI in 2024 (this was up from 50% in 2023). An application like ChatGPT is just beginning, and it’s clear that GenAI is not going away.