Generative AI: A consulting market worth investing in, but staking the right type of early claim will be critical
Recent announcements from consulting and technology services firms concerning billions of dollars of planned investment in generative AI are attempts to shape the competitive landscape of this emerging market.
Generative AI is a classic example of an early-stage, inchoate market in which the shape and extent of demand is very uncertain and could develop in different directions. In the professional services space, unpredictability is amplified by fuzzy definitions (not all AI is actually AI) and by clients whose needs can turn on a dime (and there are plenty of reasons for them to change in the current economic environment).
The initiatives announced by firms in the last couple of months raise two questions: How big and fast-growing is the market for generative AI likely to be? What actions should firms take to ensure that their share of the future market will be sufficient to cover the investments they’re planning to make?
To begin with the first of these questions, our research suggests that the level of interest in generative AI among client organisations is unmistakably high. Eighty-five percent of respondents (all of whom were CxOs and their direct reports who engage in buying professional services) said that their organisations had already started to at least experiment with ChatGPT and other, similar tools. Most of this activity is currently happening in the data & analytics and technology spaces, but one in five organisations say they’re already using generative AI to some extent in their operations, and one in 10 in strategy work. However, only 14% of respondents overall described their use of this technology as “extensive.” What we’re really seeing here is a rapid spread of diffuse experimentation, rather than anything centrally planned.