If 2023 was the year companies poured money into generative AI, 2024 is the year they’re hoping those investments will start paying off. From Microsoft ( MSFT ) and Google ( GOOG , GOOGL ) to Samsung and even Volkswagen and Mercedes, businesses are increasingly monetizing their creative AI offerings as interest in the technology continues among consumers and enterprise users.
Analysts at UBS Global Research and Evidence say, “We expect 2024 to be the year of growth and early adoption and 2025-27 to be when markets see more applications taking advantage of these features. will go away because many important elements come together.” Lab wrote in an investor note on Monday.
On Wednesday, Samsung debuted its Galaxy S24 line of smartphones with the company’s Galaxy AI package complete with AI capabilities including live translation and photo editing features. On Monday, Microsoft announced that it will begin selling subscriptions for the consumer version of its Copilot AI assistant for $20 per month per user.
The tech giant also said it is opening up the enterprise version of its Copilot for Microsoft 365 to small and medium-sized businesses. It previously only sold the service to businesses with more than 300 employees.
Intel ( INTC ), Nvidia ( NVDA ), AMD ( AMD ), and Qualcomm ( QCOM ) are selling chips with their own neural processing units for AI apps. PC makers are jumping into the fray by marketing their laptops and desktops as AI-ready. And at CES 2024, Volkswagen said it was bringing ChatGPT to its in-car voice assistant by mid-year.
Now companies only need buy-in from consumers.
“Is there a killer app? Is there a viable application or change that will force people to fundamentally pay more? I think it’s something [companies] will struggle with,” Gartner analyst Ranjit Atwal told Yahoo Finance.
But that’s not stopping businesses from taking a chance on what could be the next great technological leap.
Time to pour
If you followed the developments at CES 2024 earlier this month, you’ll know that seemingly every tech-adjacent company on Earth is using AI as a means of marketing their products.
Now it’s up to the companies building real AI products to deliver on the promise that the technology will truly improve our lives.
The problem for companies, says Atwal, is that creative AI products provide consumers with cumulative benefits rather than a single mind-blowing app that’s easy to sell people on.
“It’s a combination of elements that will … make the device easier to use. It’ll make you more productive. So everything kind of adds up,” he said. “It’s very difficult to make gross money.”
While selling the average consumer on generative AI products can be difficult, enterprise customers are already on board.
According to Yusuf Mehdi, Microsoft’s VP and consumer chief marketing officer, 77% of people in businesses who have used the company’s Copilot business software say they would never want to give it up. Microsoft’s Copilot for Microsoft 365 currently costs $30 per user per month, the same price as Google’s own enterprise offering, Duet AI for Workspace Enterprise.
Microsoft’s Copilot Pro will test consumer appetite for paid generative AI services. Similarly, the so-called AI PC will be the PC industry’s marketing term for laptops and desktops equipped with neural processing units designed to power AI applications.
So far, chipmakers like Intel say neural processors will benefit the average user by running generative AI apps on their personal devices rather than in the cloud, which will help improve overall privacy and security.
But beyond that, he says we’ll have to wait to see what AIPCs are really capable of before we know what kind of apps developers will produce.
According to UBS’s Global Evidence and Research Lab, though, it’s only a matter of time before consumers get on board.
“We think about drivers, use cases and technology enablers [generative AI] On-edge devices are lining up for early high-end adoption in 2024 and mainstream entry from 2025-27,” UBS analysts wrote in a research paper.
“It has the potential to trigger positive mix changes. [spending on higher priced products] (driving requirements for more processing, storage, and upgraded peripherals), and can also stretch replacement cycles as new devices offer increased efficiency, enable content creation, productivity, and personalization. “
Now it’s up to tech companies to interest consumers in the benefits of generative AI if they hope to get some return on their investment.
Daniel Hawley is the Tech Editor at Yahoo Finance. He has been covering the tech industry since 2011. You can follow him on Twitter. @DanielHowley.
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