Generative AI is expected to have a transformational impact on business and is rated by US executives KPMG surveyed as the top emerging technology that will impact their business in the next year and a half. Nearly all, or 97 percent of respondents, expect their organization to be impacted highly or extremely highly in the next 12 to 18 months.
The survey of 200 senior US business leaders, which was fielded in June, also found that 80 percent believe that it will disrupt their industry and nearly all (93 percent) think that generative AI will provide value to their business.
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"This survey affirms what I hear from CEOs: organizations already experimenting with generative AI are even more bullish about how it will monumentally change the way businesses are run,” said Atif Zaim, National Managing Principal, Advisory, KPMG LLP. “The ability to rapidly analyze data from across their organization will give executives the ability to truly move with the agility that is critical in today’s volatile business environment.”
Those with generative AI tools and solutions already deployed (35 percent) show higher levels of optimism around generative AI’s impact. They are:
“Generative AI will enable business transformation well beyond the IT function,” said Steve Chase, U.S. Consulting Leader, KPMG LLP. “These findings underscore that first-mover organizations that swiftly implemented generative AI are already realizing significant business value and anticipate additional opportunities across front, middle, and back-office functions.”
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Respondents say that uncertainty about the regulatory environment is the top barrier to implementing generative AI, but most businesses are not slowing down their AI adoption.
Even though approximately half of businesses feel very prepared to deal with generative AI regulatory requirements, 77 percent of businesses polled say that the uncertain and evolving regulatory landscape significantly impacts their generative AI investment decisions. Yet approximately a third (35 percent) say they will not pause adoption and 4 in 10 (41 percent) will take a short (3-6 month) pause to monitor the regulatory landscape.
Business leaders also anticipate the most regulatory action to be around data privacy (51 percent), security (46 percent), and transparency (44 percent), while less is anticipated around copyright (25 percent) and bias (24 percent).
“Generative AI adoption is quickly moving forward, and organizations are figuring out how to comply with regulation,” said Emily Frolick, Trusted Imperative Leader, KPMG LLP. “Executives need to proceed with vigilance as regulation around generative AI is built and implemented.”
A large majority (83 percent) anticipate an increase in generative AI investment by more than 50 percent in the next six months to one year, with 45 percent saying it will at least double. Many will use this increased investment to prioritize infrastructure and scaling business through generative AI use. The opportunity to improve existing business models and demand from leadership are the two drivers leading the anticipated increase in spending.
While investments will happen in functional areas across the board, marketing and sales is the most common area of focus for the leaders surveyed, with three in four saying they are likely to invest more in the function.
“These findings demonstrate a clear commitment among businesses to capitalize on the opportunities presented by generative AI,” said Kevin Bogle, KPMG’s Deal Advisory & Strategy Leader for TMT. “By prioritizing investment in infrastructure and focusing on leveraging generative AI for marketing and sales, organizations are positioning themselves to improve their business models, meet customer expectations, and stay ahead in today's competitive landscape.”
Most executives (81percent) believe that generative AI will have a positive impact on their workforce and productivity, with those who already deployed it reporting extreme positive impact.
Virtually all of the business leaders (97 percent) agree to some extent that generative AI will play a role in allowing their organizations’ employees to be more thoughtful and creative by relieving them from manual processes. Furthermore, almost 8 in 10 business leaders feel that the productivity gains made from generative AI will have an overall positive impact on reducing employee stress and burnout. Therefore, it comes to no surprise that generative AI is expected to support workforce initiatives like increased professional development, reduced overtime, and increases in personal connectivity.
As the public becomes more familiar with generative AI, concerns around its negative impact on the workforce have been decreasing since the KPMG March 2023 generative AI survey, with significant decreases in job security concerns (to 20 percent in June 2023 from 47 percent in March 2023), and professional developments worries (to 26 percent in June 2023 from 41 percent in March 2023).
The majority of executives (53 percent) remain positive that generative AI will have a positive impact on expanding the overall headcount. Executives most frequently cited generative AI specialists as priority hires; they also expect increased demand for data scientists, developers and new senior management roles focused on generative AI. In addition, approximately half of organizations are upskilling their existing employees in an effort to adjust for generative AI either through small- or large-scale efforts.
“Generative AI can unlock the human,” said Felicia Lyon, Principal, Human Capital Advisory, KPMG LLP. “It can help organizations break down processes, look into how to do work more efficiently, help transition how humans work and reskill people.”
Accelerated rise in risk management prioritization
The majority of survey participants (77 percent) said that they are confident in their ability to mitigate risks associated with generative AI, while those who have already deployed generative AI have even greater confidence (80 percent). However, to build and maintain stakeholder trust, prioritizing effective risk management has increased across the board since March, with protecting personal data and privacy concerns leading the priority list at 63 percent, followed by cybersecurity at 62 percent and responsibility of data input and AI generated content output at 61 percent.
“Organizations’ adoption of generative AI is at multiple stages, and so is their understanding and implementation of effective risk management processes,” said Frolick. “As use of generative AI progresses, organizations need to build risk management protocols that can foster growth, build trust and secure stakeholders’ confidence.”