Hello. This is Alex Bakker with what’s important in the IT and business services industry this week.

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Generative AI

Last week, we looked at data from our recent study on generative AI that showed which use cases are receiving the most funding from enterprises. The data also shows that, while some of the most well-funded areas from this year are expected to deliver value into 2025, some emerging use cases are expected to contribute significantly despite receiving less funding this year. The fact that as many as five out of the top 10 use cases are new for 2025 highlights the fast-changing nature of GenAI adoption in the market.

Data Watch

Why It Matters

Last week we discussed that many of the highly funded use cases to date are ones that drive value for customer-facing, human-in-the-loop work. This makes sense as efficiency and service quality in customer service processes provide a way to see value, but the context limits the opportunity to scale due to the human being in the loop.

Given that past research has highlighted the importance of revenue growth as a top enterprise objective for the adoption of AI, we expect that the higher-value use cases will be ones that do not involve humans in the loop so enterprises can achieve scale.

What’s Next?

We predict two waves of AI adoption:

Enterprises expect that Wave 2 will add value quickly. And, based on the investment and funding for those use cases so far, they still expect to be able to achieve significant value over the next year. If they’re right, then GenAI will drive a new wave of productivity that is uncorrelated with hours worked and may reduce bottlenecks for parts of an organization that are currently limited by a lack of information or expertise.

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