Source URL: https://www.theregister.com/2024/09/04/servicenow_remains_bullish_on_gen_ai/
Source: The Register
Title: GenAI spending bubble? Definitely ‘maybe’ says ServiceNow
Feedly Summary: It won’t generate hundreds of million of dollars for customers tomorrow, and there’s a ‘lot of noise’ from tech industry
ServiceNow is trying to assure investors that payback for enterprise GenAI investment is coming, but it may not be soon and biz customers shouldn’t expect to get huge returns “tomorrow".…
AI Summary and Description: Yes
Summary: The text discusses ServiceNow’s efforts to reassure investors about the future payback of investments in generative AI (GenAI), highlighting the current challenges in customer commitment and expectations. It reflects on industry skepticism regarding GenAI’s ROI and notes potential long-term benefits in sectors like pharmaceuticals. The piece also touches upon data governance concerns affecting the deployment of AI technologies and emphasizes the need for cautious optimism as the technology develops.
Detailed Description:
– ServiceNow is addressing skepticism from investors about the immediate returns on generative AI investments, suggesting that significant paybacks may take time.
– Conversations with CIOs reveal two main challenges:
– Difficulty in justifying upfront investments and expected savings.
– A perception of generative AI as an exaggerated promise or “Holy Grail” of technology.
– The CFO of ServiceNow, Gina Mastantuono, recognizes the challenges of understanding and implementing this new technology:
– She highlights the pharmaceutical industry as a prime example where GenAI could accelerate product development timelines significantly, potentially reducing the average time to market from 6.6 years to as low as 5.6 years.
– The conversation suggests that while immediate financial returns may not be realized, long-term gains are likely as industries leverage AI to resolve complex issues and enhance efficiency.
– Mastantuono stressed that these early days of AI’s integration into enterprise settings require a mix of innovation and measured expectations.
– Gartner’s analysis positions GenAI in the “trough of disillusionment,” indicating a period of reevaluation as expectations align better with actual capabilities.
– Concerns surrounding data governance and security are highlighted, particularly regarding the use of generative AI and tools like Microsoft Copilot, which could impede the advancement of AI projects in some organizations.
– ServiceNow’s internal pilot of GenAI projects reportedly resulted in around $10 million in annualized savings, showcasing tangible benefits that may encourage further adoption.
– The article concludes with Gartner predicting mainstream adoption of GenAI in workplaces within the next two years, suggesting an optimistic future for AI technologies if current challenges are properly addressed.
Key Takeaways:
– The discussions highlight the balancing act between innovation in AI and realistic expectation management from enterprise stakeholders.
– Companies in the AI space, including ServiceNow, may need to continue pilot evaluations and results presentation to instill confidence in potential adopters.
– Data governance and compliance considerations will play a critical role in shaping the trajectory of AI implementations in enterprises, as organizations strive to manage risk alongside leveraging new technologies.