AI and cloud investments aren’t paying off yet for most companies, heightening impatience among early adopters who have poured billions of dollars and resources into the technologies.
So-called “Top Performers” companies who constitute 12% of those polled are reaping the rewards of their investments, but just 37% of all other companies have a formalized strategy to identify, deploy and track AI use across their organizations, according to a PwC survey released Tuesday. The survey of more than 1,000 business and tech execs was conducted from early June and to early July.
PwC defines Top Performer companies as twice as likely than other companies to develop generative AI-based products and services (64% versus 27%); implement a responsible AI approach (77% vs. 36%); and adopt an AI-specific operating model (66% vs. 31%).
“There are absolutely companies benefitting from the hype cycle, but a small segment,” Matt Hobbs, cloud, engineering, data and AI practice leader at PwC, said in an interview. “There is a strong correlation that they have deployed reasonable AI approaches based on a specific AI model, while increasing their AI budgets.”
The findings address what are increasingly questions echoed throughout Silicon Valley and beyond: Are we still in an AI hype cycle? And is it paying off yet?
The answers are mixed. While the hype cycle is alive and well, frustration is growing in the executive suite and among the developer ranks over early ROI. Top-performing companies have forged ahead by migrating apps to the cloud and advancing native app development. “They have aggressively built a digital foundation in the cloud,” Hobbs said.
To the chagrin of most, though, AI, despite its vast potential, carries inherent risks — ranging from missteps in accuracy to a lack of organizational readiness and process optimization that can undercut progress.
What is holding back many is a historical tendency to be slow in modernizing data and migrating it to the cloud, Hobbs added.
The greater pitfall, however, is doing nothing, he cautioned.
“You could argue that whether in hype cycle or not, AI is accelerating the digital revolution, and companies have to move,” Hobbs said. Those who have been slower to embrace AI, such as those in the health care and financial industries, have been hampered by third-party regulatory bodies over data use.
The survey, now in its third year, also revealed that 82% of Top Performers have broadly seized on GenAI for modernization, compared with 53% of other companies. In software development, 75% of Top Performers have broadly adopted GenAI, compared with 51% of other companies.
Indeed, across 15 IT categories covered in the survey, the delta for broad adoption between Top Performers and everyone else averaged 23%.
Meanwhile, 72% of Top Performers say they’ve achieved “all-in cloud adoption” compared to other companies (33%). Top Performers are more likely to say they exclusively use a single cloud service provider (38%).
Among all companies, 56% said they primarily use one cloud service provider for more than half of their workloads and others for specialized tasks. About one-fourth (27%) said they depend on one cloud service provider, down from 34% a year ago.
In an unrelated study, trailblazing tech players are focusing tech innovation in great part on AI patent filings, according to GlobalData’s Disruptor Intelligence Center.
Amazon.com Inc. has filed more than 9,000 AI-related patents, with half coming in the last three years. Walmart Inc. has filed more than 3,000 such patents, with 20% in the same period.
At the same time, Microsoft Corp. has introduced Copilot Pages, and integrated more AI functions into its flagship products.
