Generative AI a top priority for firms, but privacy concerns remain: GIC survey
GIC chief Lim Chow Kiat said the sovereign wealth fund will invest in the 'right places' in AI, given the technology's rapid development. PHOTO: GIC
SAN FRANCISCO - Generative artificial intelligence (AI) has emerged as a top priority for many companies seeking to boost efficiency and productivity.
But they have concerns over the adoption of the technology in the areas of data privacy and talent shortages , according to a new survey by GIC and consulting firm Bain & Company, which polled senior executives from 44 companies in 12 markets including the US, Singapore and India.
It found that 36 per cent of those surveyed had data privacy concerns around the use of generative AI, while 32 per cent pointed to a lack of in-house expertise or resources to adopt the technology. Another 20 per cent were unsure about its return on investment.
The firms polled – spanning industries such as financial services, technology as well as media and entertainment – were among the participants of GIC's Bridge Forum Summit held in San Francisco on May 6 and 7 . The biennial event is expected to host about 300 attendees, including entrepreneurs, start-up founders and tech executives from 17 countries.
Despite the concerns, interest in generative AI adoption is high, with 82 per cent of firms exploring the use of the technology for software development, followed by IT applications at 64 per cent and improving employee effectiveness at 61 per cent.
In addition, 90 per cent of respondents said generative AI has met or exceeded expectations, with the same share expressing trust that employees are using or will use the technology.
More than 60 per cent of respondents have set aside funds for adopting generative AI. Budgets vary by company size: More than half of the firms earning under US$500 million (S$646.1 million) in annual revenue allocated between US$1 million and US$5 million per year, while 38 per cent set aside less than US$1 million a year .
Larger companies with annual revenue above US$5 billion reported the highest levels of spending on generative AI: Around 29 per cent allocated between US$1 million and US$5 million, another 29 per cent set aside between US$6 million and US$10 million, and 14 per cent reported budgets exceeding US$10 million.
But 14 per cent of these larger firms had no AI budget, and another 14 per cent allocated less than US$1 million.
Mr Chris Emanuel, head of GIC's technology investment group, told The Straits Times on May 7 that the generative AI journey for companies seeking to adopt the technology is still in its early stages.
Firms seeking to adopt generative AI have much to learn – from having the right expertise and choosing suitable tools, to putting in place safeguards for data privacy and regulatory compliance.
These gaps, he noted, will open up investment opportunities as tech firms innovate to meet such needs.
'GIC is focused on making sure that the companies who are building AI solutions have long-term durable moats,' Mr Emanuel added.
GIC chief executive Lim Chow Kiat said in his speech at the event on May 7 that the sovereign wealth fund will need to allocate capital to the 'right places', given the pace of AI developments.
He said that GIC sees the AI 'value chain' in three parts – enablers such as semiconductor, cloud and cyber security providers; monetisers building apps, services and platforms; and adopters using AI to improve processes, customer experiences and productivity.
'We see long-term potential across all three segments, but we also know that hype and overvaluations are real risks,' Mr Lim said.
'That's why we are focused on identifying durable moats, differentiated technology and teams, and sound business models.'
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