Everywhere we turn, there’s a flood of information — articles, statistics, books and boardroom discussions — all highlighting the impending transformative impact of artificial intelligence on our world. While the excitement and anticipation are palpable, there’s a mismatch between the hype and the actual rates of AI adoption.
Despite the substantial investments and the media’s narratives, when compared to the rates that businesses are adopting artificial intelligence, the math simply isn’t adding up. One plus one is not equalling two; it’s closer to .01.
U.S. based companies have invested nearly $290 billion in AI, with optimistic projections estimating a total of $1.2 trillion to $3.8 trillion to be applied toward research, development, and across a variety of applications and industries such as driverless cars, healthcare, commercial banking, and the federal government.
According to Goldman Sachs Research, the U.S. is the market leader in AI technology, with American companies likely to be early adopters and China investments to be likely smaller and more delayed. This makes sense, when 83% of 333 million U.S. companies claim they will be using AI in their business strategies.
While the promise of AI is undeniable, only 5.4% of U.S. companies have actually leveraged AI as of February 2024, according to the U.S. Census Bureau. While AI usage is growing, rising from 3.7% in the fall 2023 to 5.4%, the total expected rise is only estimated to be single digits, 6.6% by fall 2024.
In comparison, China has the highest rate of AI adoption, with 58% of its companies leveraging AI. So while their investments are reportedly smaller compared to that of companies in the U.S., their efficacy and use of their investments are 974% greater.
The main question now is, why. What is the root cause and driving force between the mismatch in investments versus adoption?
While there are many speculations, some are clear:
- Fear: Knowledge workers and employees are resistant to embrace new AI technologies in fear it will replace their jobs. Employees are understandably concerned about the impact on their livelihoods, and this fear can be a significant barrier to the widespread acceptance of AI within organizations.
- Inability to calculate business value: The total cost of ownership associated with implementing and maintaining AI systems often fails to provide a compelling return on investment, making it challenging for organizations to justify the substantial financial commitment required. The true value of AI, which may lie in its potential to enhance productivity, improve decision-making, and unlock new business opportunities, is not always easily quantifiable, making it a hard sell to company leaders.
- It’s complicated: The technological complexity involved in integrating AI into existing IT ecosystems presents a significant hurdle. Many Fortune 1000s are still grappling with the challenge of reducing their technical debt and modernizing their overall technology infrastructure. Adding AI technology on top of this existing infrastructure can be akin to building AI on top of a house of cards, creating a precarious and unstable foundation.
- Too many strategic priorities: The tension between managing current strategic priorities and exploring innovative technologies like AI can be a barrier to widespread adoption. Organizations are often torn between the need to focus on driving market growth, expanding margins, and improving operational efficiency — their immediate and pressing concerns — and the desire to experiment with and invest in cutting-edge technologies that may yield long-term benefits. This balance is delicate, and the limited availability of resources, both in terms of funding and personnel, can make it challenging for organizations to allocate the necessary attention and resources to AI initiatives.
While there are plenty of logical reasons for the mismatch between AI investments and adoption within the US market, its impending transformative impact however is clear. The technology is here to stay and will likely be embedded in our day-to-day lives without us even knowing it. The question remains, when (not if) the adoption will catch up to the investments.
