Generative AI Could Raise Global GDP by 7%

Retailers can create applications that give shoppers a next-generation experience, creating a significant competitive advantage in an era when customers expect to have a single natural-language interface help them select products. For example, generative AI can improve the process of choosing and ordering ingredients for a meal or preparing food—imagine a chatbot that could pull up the most popular tips from the comments attached to a recipe. There is also a big opportunity to enhance customer value management by delivering personalized marketing campaigns through a chatbot. Such applications can have human-like conversations about products in ways that can increase customer satisfaction, traffic, and brand loyalty.

Over the years, machines have given human workers various “superpowers”; for instance, industrial-age machines enabled workers to accomplish physical tasks beyond the capabilities of their own bodies. More recently, computers have enabled knowledge workers to perform calculations that would have taken years to do manually. the economic potential of generative ai Pharma companies that have used this approach have reported high success rates in clinical trials for the top five indications recommended by a foundation model for a tested drug. This success has allowed these drugs to progress smoothly into Phase 3 trials, significantly accelerating the drug development process.

Jobs and tasks most likely to be automated by generative AI and AI, generally

Fine-tuning tends to reduce the cost of inference by making it possible to rely on smaller ‘seed’ models than the most powerful LLMs and LMMs, while matching or exceeding their performance for specific business purposes. However, fine-tuning does require access to specialized data that is typically proprietary—data that the tech giants for the most part don’t have access to. We saw this dynamic play out in the evolution from the monolithic mainframe computer to the modular PC. Once IBM’s System/360 series computer system introduced a modular architecture for mainframes, along with Application Programming Interfaces (APIs) that enabled interoperability among modules, the industry fragmented, with different companies focusing on different modules of the technology.

In the overall average for global growth, generative AI adds about 0.6 percentage points by 2040 for early adopters, while late adopters can expect an increase of 0.1 percentage points. The advanced machine learning that powers gen AI–enabled products has been decades in the making. But since ChatGPT came off the starting block in late 2022, new iterations of gen AI technology have been released several times a month. In March 2023 alone, there were six major steps forward, including new customer relationship management solutions and support for the financial services industry. Interacting with most discriminative AI models requires the use of specific syntax or knowledge of a programming language. This takes time to adapt to and greatly limits the range of people capable of using the model.

Generative AI could propel higher productivity growth

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. AI high performers are much more likely than others to use AI in product and service development.

• Analyzing databases detailing the task content of over 900 occupations, our economists estimate that roughly two-thirds of U.S. occupations are exposed to some degree of automation by AI.
• In the first two examples, it serves as a virtual expert, while in the following two, it lends a hand as a virtual collaborator.
• This estimate would roughly double if we include the impact of embedding generative AI into software that is currently used for other tasks beyond those use cases.
• While it is likely to lead to increased efficiency and productivity, it is also expected to lead to job displacement for some workers.
• It does not account for potential knock-on effects the technology may have on customer satisfaction and retention arising from an improved experience, including better understanding of the customer’s context that can assist human agents in providing more personalized help and recommendations.

By comparison, other respondents cite strategy issues, such as setting a clearly defined AI vision that is linked with business value or finding sufficient resources. The Big Tech companies are, of course, aware of all this and aggressively pursuing downstream alliances to access the proprietary data they lack. The companies that own that data are, however, in a superior bargaining position—though they may not know it. The downstream companies have the option to play junior partner in such an alliance with a big tech firm or they can seize the business opportunity themselves, taking the lead in teaming up with smaller and open-source developers. This second, more intrepid approach requires the company to dramatically increase its expertise in smaller GenAI models, while investing seriously in internal data science and engineering capabilities.

Early adopters are harnessing solutions such as ChatGPT as well as industry-specific solutions, primarily for software and knowledge applications. Retailers can combine existing AI tools with generative AI to enhance the capabilities of chatbots, enabling them to better mimic the interaction style of human agents—for example, by responding directly to a customer’s query, tracking or canceling an order, offering discounts, and upselling. Automating repetitive tasks allows human agents to devote more time to handling complicated customer problems and obtaining contextual information. Software engineering is a significant function in most companies, and it continues to grow as all large companies, not just tech titans, embed software in a wide array of products and services. For example, much of the value of new vehicles comes from digital features such as adaptive cruise control, parking assistance, and IoT connectivity.