ANZ leaders invest USD$15 million in generative AI for 2024

Australia is positioning itself as a leader in generative AI (Gen AI) investment, with a new Cognizant study revealing that businesses in Australia and New Zealand (ANZ) are investing USD $15 million in Gen AI in 2024, surpassing the global average of USD $12.5 million.

This level of investment underscores the region's confidence in AI's potential but also highlights the unique challenges that still need to be addressed.

With USD $15 million earmarked for 2024 compared to USD $12.5 million globally, ANZ companies are displaying strong confidence in Gen AI's transformative power. The data, evaluating IT and business leaders' sentiment towards Gen AI accelerators and inhibitors, shows that ANZ leaders have a momentum score that is 15% higher than the global average. The momentum score, calculated based on the survey results, represents business leaders' assessment of 18 internal and external factors accelerating or inhibiting Gen AI adoption in their enterprises.

Cognizant produced "The AI Advantage: Why ANZ is Positioned for Gen AI Success" with Oxford Economics. The work was part of a global study that interviewed 2,200 business leaders in 23 countries and across 15 industries, including 200 C-suite leaders in ANZ.

The study assessed a wide range of Gen AI adoption trends, including investment levels, use cases, the criticality of Gen AI strategies to business success, and organisational readiness. The high level of investment and momentum score reflect regional leaders' belief in the flexibility of their operating models and high market demand for Gen AI enabled products and services.

Productivity is cited as the top driver for AI adoption, with 48% of the respondents expecting it to impact their business strategy imminently and 56% pointing to potential revenue growth as a justification for their Gen AI business case. However, the same leaders predict that the technology will take between four to five years to mature fully.

Rob Marchiori, Cognizant's Australian Country Manager, commented: "This report highlights how Australia and New Zealand are frontrunners in the Gen AI race, underscoring our region's belief in the technology's potential. However, to maintain this momentum, it's crucial that we focus on proper implementation with strategies that are both robust and adaptable to drive sustained growth."

While ANZ businesses demonstrate confidence in their Gen AI investments, the team at Cognizant Australia advises that these promising developments should not lead to underestimating the challenges ahead. Cognizant's experts mention that one of the next hurdles for local businesses will be safely scaling the technology. Many organisations are still in the initial phases of Gen AI implementation, working on proof-of-concepts, use cases, and adapting infrastructure. However, deciding where and how to scale the technology effectively is a critical step many businesses still need to face.

The study suggests that the availability of talent and the maturity of AI-related technology and infrastructure are some top barriers to Gen AI adoption. While most leaders in ANZ rate their data quality as strong, only 16% are confident in accessing the necessary data. This discrepancy points to challenges in leveraging abundant data due to legacy systems or infrastructure not designed for the Gen AI era. Additionally, survey respondents, almost evenly split between business and IT leaders, reveal differing views on data infrastructure readiness, emphasising the need for greater alignment within enterprises.

The report highlights that one-third of ANZ businesses deploy Gen AI in customer-facing areas, while 29% use it in software development. As ANZ businesses continue to pursue Gen AI, companies must balance their ambition with a practical approach. Addressing gaps in technological infrastructure, enhancing AI literacy, and fostering strategic partnerships will be vital to converting optimism into tangible success.

To successfully scale Gen AI, businesses must prioritise strategic use cases that are feasible and likely to deliver the highest value quickly. Investing in high-impact areas is deemed the best way to ensure real benefits and ROI. Building a scalable ecosystem also remains essential, suggesting that businesses should collaborate with cloud providers and AI experts to access the necessary infrastructure, expertise, and insights for scaling their AI projects.