Generative AI, also known as Gen AI, is set to make a significant impact on the tech industry, with experts predicting a whopping $2.6-4.4 trillion growth in the coming years. This groundbreaking technology is expected to revolutionize various sectors, particularly software engineering, customer operations, product development, research and development (R&D), as well as sales and marketing.
A recent report by Nasscom and McKinsey & Company highlights that approximately 75% of Gen AI’s economic value will derive from these key sectors. The integration of generative AI is poised to enhance productivity and drive growth in the tech industry over the next five years. The report suggests that more than 100 Gen AI use cases could potentially fuel an additional 15 to 20% growth within this timeframe.
Moreover, the findings indicate that Gen AI has the potential to enhance delivery productivity by a staggering 30% in the next two to three years. This technology has witnessed rapid advancements in the past six to eight months, with multiple releases encompassing different models, datasets, and applications.
Sangeeta Gupta, Senior Vice President and Chief Strategy Officer at Nasscom, expressed her views on the evolving nature of generative AI. She stated, The generative AI space will continue to evolve, reshaping technology service providers and introducing new capabilities. Providers are re-evaluating their approaches and intensifying their investments in technology, talent, risk management, and even mergers and acquisitions with Gen AI startups.
Gen AI is expected to bring about a significant increase in productivity, with general and administrative costs projected to experience a 40% surge over the next three years. Functions like finance and accounting, legal, and HR are set to benefit from this surge.
While generative AI presents numerous opportunities, it also comes with its challenges for technology service providers. The impact of this technology depends on factors such as the existing service line and vertical mix, as well as the interplay of drivers and the speed of adoption, as highlighted in the report.
In conclusion, generative AI, or Gen AI, is poised to play a transformative role in the tech industry, contributing to substantial economic growth. With its potential to maximize productivity and streamline operations across various sectors, the integration of Gen AI is expected to reshape the landscape of technology service providers in the coming years.
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