AI adoption among IT clients faces a significant challenge: cost. According to an Infosys executive, while businesses are 'excited' about artificial intelligence, the high implementation costs are causing them to be cautious.
Speaking with Reuters, Satish HC, executive vice-president and co-head of delivery at Infosys, emphasized the importance of considering return on investment given the relatively high cost of AI technology.
Cost-Cutting IT Businesses Reluctant on AI
Satish stated that recent budget allocations have been primarily focused on critical requirements such as improving cybersecurity resilience. This prioritization of cost-cutting projects is affecting the rate at which organizations can scale up their AI initiatives.
As a result, despite the potential benefits, financial constraints limit some companies' ability to adopt AI. "Some of those priorities are reducing the pace at which organizations go," Satish said.
The Indian information technology sector is expected to grow modestly by 3.8% to $253.9 billion in the fiscal year ending March 2024. However, this growth projection is tempered by clients' reluctance to spend more in the face of inflationary pressures and global economic uncertainty.
Satish emphasized the importance of taking a cautious approach, especially in light of ongoing geopolitical events such as elections around the world.
Despite these challenges, Infosys remains optimistic about the future of AI technology. Satish stated that Infosys has adopted an "AI first" strategy, building on its experience with digital technologies. He suggested that, while 2023 was a difficult year, 2024 could pave the way for faster AI adoption. "That's why I call this a bridge year," he said,
Tech Companies Adopting AI Tools
A survey conducted by Insight Enterprises discovered that many business leaders have implemented generative AI tools within their organizations. These tools are primarily used for data analysis, task collaboration, and content creation. Despite the potential benefits, challenges such as employee knowledge/training and security remain.
Business leaders tasked with implementing generative AI initiatives focus on determining the return on investment. Key goals include increasing customer satisfaction, increasing service availability, lowering operational costs, and increasing employee productivity. While security is still a major concern, only a small percentage of businesses see implementation costs as significant barriers.
Despite widespread recognition of AI's potential benefits, high implementation costs impede its adoption among IT clients. Companies such as Infosys remain optimistic about the future of artificial intelligence, but caution is advised in light of economic uncertainties.
In Other News
In case you missed it, Google has temporarily suspended its AI image creation tool in Gemini due to errors in historical data. The tech giant has taken a proactive approach, addressing the concerns expressed by concerned users.
Google's Senior Vice President, Prabhakar Raghavan, acknowledged the mistakes in a detailed blog post, shedding light on the challenges that AI technology faces.
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