Profit Before People? 64% Of CEOs Anticipate Increase In Workload Thanks To Generative AI

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  • August 23, 2024
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In a groundbreaking development that could redefine corporate landscapes, generative Artificial Intelligence (AI) is being hailed as a transformative technology by CEOs, according to a recent PwC survey. The findings, unveiled ahead of the AI-themed World Economic Forum in Davos, Switzerland, suggest a significant shift in how businesses might operate in the near future.

This recent survey has highlighted a growing trend among CEOs turning to generative Artificial Intelligence (AI) for increased profits, raising questions about the broader implications for the traditional workforce and economic balance.

Approximately 68% of U.S. CEOs and 64% globally, as surveyed by PwC, anticipate that generative AI will notably increase the volume of work employees can handle over the next 12 months. This tech advancement is expected to not only boost worker productivity but also have a substantial impact on corporate financials. About half of the U.S. CEOs project that this technology will enhance their personal productivity as well.

“Investors are also increasingly demanding profitable growth from executives, leading many CEOs to turn not only to cost control strategies but also to GenAI,” PwC reported. “What is attractive about GenAI is its dual ability to generate gains in efficiency that enable company reinvention as well as curb current expenses. This could mean that, when macroeconomic “As headwinds subside, the stage is set for a potentially faster rate of growth on a lower cost basis.”

The anticipated productivity surge is poised to deliver a robust boost to profits. Nearly 44% of surveyed CEOs envision a net profit increase due to generative AI over the coming year, with only 3% predicting a net decrease. This optimistic outlook reflects a growing confidence in AI’s ability to drive profitable growth, leading many executives to explore both cost containment and innovative strategies like GenAI. PwC highlights GenAI’s potential in simultaneously generating efficiency gains to curb expenses and enabling company reinvention.

While this points to a potential leap in corporate efficiency, it also sparks concerns about an over-reliance on AI technologies at the expense of human-centric approaches.

Moreover, 2024 is shaping up as a pivotal year for business model reinvention, spurred by the capabilities of generative AI. PwC’s previous research underscores the broader economic impact of AI, projecting its contribution of up to $15.7 trillion to the global economy by 2030 – a figure surpassing the current combined outputs of China and India. The most significant economic gains from generative AI are expected in China, with an approximate 26% boost to GDP by 2030, and in North America, with a potential 14.5% increase.

Nonetheless, the recent PwC survey has sparked global criticism among users who believe that these profits will predominantly benefit CEOs, thereby exacerbating societal injustice and inequality.

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For some, this headline brought back memories of the Great Depression, and they believe that AI could lead the world into a similar scenario once more.

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The survey also entails that investors strategically position themselves to capitalize on the projected profit surge. Major stock indexes like the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite continue to hover around record highs in 2024. Large-cap tech companies with significant AI exposure, including Microsoft, Alphabet, and Amazon, are top picks among Wall Street analysts. Notably, the share price of Nvidia, a leading generative AI chip manufacturer, has soared to new records in the early months of 2024.

Wall Street currently anticipates an 11% growth in S&P 500 profits in 2024, fueled by the proliferation of new artificial intelligence tools and a cooling inflation. This outlook marks a significant increase from the 3% profit growth in the previous year, attributed to aggressive investments in the first wave of generative AI technologies amidst persisting inflation challenges.

Morgan Stanley analyst Keith Weiss, in a client note obtained by Yahoo Finance, expressed a bullish view of the generative AI market. “The potential rewards from large and transformative impacts of GenAI still outweigh the rising investor expectations implied by solid CY23 stock performance,” Weiss stated. “On balance, we are just getting started.”

As generative AI continues to evolve, its integration into various business sectors is anticipated to not only revolutionize existing models but also create new paradigms of operational efficiency and profitability. The optimism among CEOs and investors alike suggests a future where AI plays a central role in shaping global economic trends.

For more Artificial intelligence news and insights, visit the news section of our website.

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Dave Andre

Editor

Digital marketing enthusiast by day, nature wanderer by dusk. Dave Andre blends two decades of AI and SaaS expertise into impactful strategies for SMEs. His weekends? Lost in books on tech trends and rejuvenating on scenic trails.

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