Strategic Benefit, Cost and Risk of Generative AI

The C-suite of many enterprises is increasingly asked by their CEO and boards to provide strategic guidance for GenAI as well as about the appropriate investments their organizations should make in this technology. Most enterprises are struggling with how to identify, vet, prioritize and guide funding decision models for generative AI. Gartner high-level guidance is to segment GenAI investments to look at several factors including value alignment to business goals, benefits, costs and risks.A deeper dive into one of these variables — namely cost — requires enterprises to stratify GenAI initiatives across a spectrum of categories. A full description and graphic depiction of these categories is the focus of the on-demand webinar Generative AI Realities: Proactive Approaches for Quantifiable Business Results. In the webinar and in this podcast, Gartner experts explore the following five categories of cost:Category 1 — Targeted purchase ($10,000 to $50,000)Category 2 — Embedded ($50,000 to $250,000)Category 3 — Horizontal or vertical off-the-shelf solutions ($250,000 to $1 million)Category 4 — Situational build ($1 million to $5 million)Category 5 — Market maker ($5 million to $100 million)In the podcast, Gartner experts discuss these cost categories along with risk and many of the other variables that must be analyzed to proactively plan GenAI investments.Gartner has also published several predictions related to enterprise challenges and the perils of GenAI investments:By 2025, growth in 90% of customized enterprise deployments of GenAI will slow as costs exceed value, resulting in pressure on vendors to introduce innovations and pricing models.By 2028, more than 50% of enterprises that have built their own large language models from scratch will abandon their efforts due to costs, complexity and technical debt in their deployments.Our host Frances Karamouzis is joined by senior director analyst Nate Suda, who covers tech, finance, value and risk in Gartner’s CIO group. He focuses on digital value creation, digital strategy and digital execution.