AI is now the top spend for nearly 50% of top tech executives across the economy: CNBC survey

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In a sign of how quickly and widely the AI ​​boom is spreading, nearly half of companies (47%) surveyed by CNBC say AI is their top priority for technology spending in the coming year and that AI budgets more than double the second largest area of ​​technology spending, cloud computing, at 21%.

That’s according to the CNBC Technology Executive Council’s latest semi-annual survey, which includes responses from top technology executives at companies outside the technology sector itself, including chief information officers, chief technology officers and chief information security officers from areas of the economy. , including marketing, pharmaceuticals, telecommunications and utilities and by public sector entities.

Collectively, nearly two-thirds say their AI investments are accelerating, and that’s a bigger slice of a smaller overall pie: just over half of tech executives (53%) say rising interest has caused them to slow overall spending. However, as AI has exploded in 2023 and tech stocks have driven the market higher, there has also been a steep decline since TEC members were last polled in the second half of 2022 in tech executives saying cost-cutting pressures due to fears of a recession was their main technology challenge over the next year. The percentage has dropped from over 30% last year to 16% today, and there has been a sharp increase in respondents who said the biggest technology challenge now was meeting customer demand for business-driven products and solutions. technology, from 9% to 26%.

The CNBC survey was conducted from May 15 to June 20, encompassing the trading period during which Nvidia crossed the $1 trillion market cap mark for the first time, after forecasting an $11 trillion increase in sales. billion for the second quarter of its fiscal 2024, citing demand for its graphics processors that power AI applications like those from Google, Microsoft and ChatGPT maker OpenAI.

Laurence Dutton | E+ | Getty Images

“It’s hard to think of one area that this couldn’t help,” said Diogo Rau, chief information officer and chief digital officer at Eli Lilly.

He said Lilly is already using generative AI to write patient safety reports and clinical narratives and will ultimately play a role in drug discovery. “What I’m excited about is what machines can come up with that no human could have imagined, like new molecules for medicines,” Rau said.

One of the most anticipated uses of Generative AI is in customer relationship management, and this is happening across multiple businesses. Eddie Fox, chief technology officer at telecommunications firm MetTel, said he has built AI functionality into his help center to read incoming customer emails, interpret intent, and then take action. He said this is making employees significantly more productive and efficient personally and providing service to customers more quickly. “It’s had a huge impact on our incident operations and has given our team about 380 extra hours (to really focus on service) a month,” said Fox.

Other TEC members have indicated that they are using AI to remove bias from job descriptions, create images for marketing, manage social media, as well as IT and HR tickets. It is also seen as a tool to deliver expert information to younger employees faster. Others have noted that their companies are early days of implementing code generation tools using generation AI, as well as AI “co-pilots” in many roles and are using generative AI to help make investment decisions.

Some have described their efforts as still preliminary. “We’re just in the learning and exploring phase,” said Nicole Coughlin, information manager for the city of Cary, North Carolina, a hub of tech startups that boasts companies including Fortnite maker Epic Games.

Even as companies across the economy are spending more on AI, many of their strategic technology goals aren’t possible with cloud computing infrastructure already built and still being improved. Cloud computing remains the most critical technology area for most businesses, with 63% of TEC members citing the cloud as critical to their company’s technology strategy over the next 12 months, but narrowly exceeded the 58% of respondents who mentioned artificial intelligence. Cybersecurity also continues to be a major threat, with 42% of respondents saying ransomware is a bigger concern today than it was a year ago.

The latest advances in artificial intelligence are being applied to the challenging cybersecurity landscape. Jim Richberg, Fortinet’s vice president of information security and its field information security manager, said his company has been using AI for more than a decade, not just to improve large generative AI models ( many billion nodes), but also to identify that subset of the model that generates most of its predictive power. “When you look at trillions of pieces of data cumulatively, a lot of the accuracy comes from a fraction of the data,” he said.

The volume of data and complex relationships currently make it difficult to manage and customize cyber defense. “Most organizations react when a problem becomes severe enough to be noticed, or they rely on best practice implementation/required practice implementation. Generative AI could enable organizations to adopt a more personalized and pro-security posture.” , he has declared.

One of the reasons AI needs to be implemented more broadly in cybersecurity is because it is already being used by hackers and they can get a head start. At least in the short term, Richberg said, generative AI will increase the ability of malicious actors to create socially engineered content that will make it harder for users to distinguish it from legitimate data. A malicious actor can steal a victim’s email traffic and address book by enabling spear phishing messages that focus on the content of the victim’s recent conversations with each of her contacts and use the language and syntax for each.

“An email to your boss versus your mom would be talking about different things and using a different language and tone. This will make it harder to distinguish harmful content based on cues like embarrassing language or topics,” she said. Similarly, generative AI will enable voice and even video facsimiles to become harder to distinguish from legitimate ones. “Most people already find it more difficult to apply the same cognitive filters to real-time interaction that they may use in evaluating email. The cumulative effect will be to make it more difficult to rely on user training to detect malicious lures and avoid compromises,” Richberg said.

Joe Levy, president of the technology group at cybersecurity firm Sophos, said it has been developing large language models and deep learning AI for many years and is now able to use AI to detect malicious software, block enterprise email compromise (BEC) and phishing attempts and predict and stop incipient ransomware attacks.

“The most exciting thing about this new generation of generative AI is its ability to make every employee in our company more effective at their jobs,” he said. This includes more effective “threat hunting,” but goes beyond basic cybersecurity work to improve customer service response and legal contract review. “Technological advances have always helped organizations grow, but they’ve never really unloaded or increased human intelligence. This time, it’s not just a technological advance, but an intelligence that we can collaborate with across a broad spectrum. range of activities, across many domains of knowledge,” Levi said.

Many tech executives have taken the position that AI won’t destroy more jobs than it creates. In the TEC survey, 47% of respondents said they believe AI technologies will create more jobs than they destroy. But another 26% said it will destroy more jobs than it creates, while an equal 26% said it is too soon to know.

“We always underestimate the social impact of any new technology. Can you think of a technology that hasn’t changed the way people interact with each other? From the car to the radio, the internet to the telephone, what has really changed has been social interaction,” Rau said. But she cares more about companies that avoid using AI based on fears. “Maybe I need to start a fund that shorts companies that ban ChatGPT and goes long on those that encourage it,” she said.

Levy said there’s good reason to worry more this time around. “While we have generations of historical precedent for technological advances and the positive and negative impacts they have had on society, we have no real precedent for a technology that is effectively alien intelligence, so there are many things we cannot predict about the impacts of ‘generative AI. That doesn’t mean we should panic, but it does mean we should be careful when it comes to considerations such as its ability to hallucinate, emerging intellectual property concerns, future legislative action designed to protect against the inevitable “double- use’ abuses, and the effects it will have on the future composition of the workforce,” he said.

But he added: “It’s not so much a concern as cautious optimism.”

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