With business tech spending down, AI shifts to practical applications

Artificial intelligence has been a buzzword for years, with the technology touted as a game-changer that could revolutionize everything from healthcare to finance, and as we move further into 2023, it appears that the hype around AI is heating up. But in the world of enterprise applications and use cases, we are seeing a shift towards practical applications of the technology.

One of the main drivers of this shift is the fact that companies are starting to spend less money on AI. In 2022, global spending on AI was estimated to be around $57 billion. While this is certainly a significant amount of money, it represents a decline from the previous year. According to IDC, a market research firm, the decline was due to a number of factors, including economic uncertainty, increased scrutiny of AI by regulators, and a lack of clear ROI for some AI applications.

The previous 12 months saw remarkable technological advancements such as ChatGPT, DALL-E 2, Galactica, and Facebook’s Make-A-Video. These impressive models were made possible largely due to the availability of vast amounts of training data and significant compute and infrastructure resources. As we move towards 2023, funding for blue-sky research will decrease, as organizations adopt a more conservative approach in preparation for an impending recession. They will shift their focus from investing in fundamental research to more practical applications. The economic uncertainty will lead to increased frugality among companies, and they are likely to rely more on pre-trained models while applying the progress achieved in previous years to more practical uses.

As a result of this shift in IT spending, we are seeing a shift in the way that AI is being used. Instead of focusing on pie-in-the-sky applications that may or may not deliver results, companies are increasingly turning to more practical applications of the technology. This includes everything from using AI to optimize supply chains to developing predictive maintenance systems for industrial machinery.

One area where we are likely to see a significant increase in the use of AI is in healthcare. In the past, there has been a lot of excitement about the potential for AI to revolutionize the way that we diagnose and treat diseases. However, as with many other applications of the technology, progress has been slower than expected. Now, we are seeing a shift towards more practical applications of AI in healthcare, such as using the technology to analyze medical images and assist with diagnosis.

Another area where we are likely to see more practical applications of AI is in finance. While there has been a lot of hype around the potential for AI to revolutionize the financial industry, many companies are now focusing on more practical use cases. This includes using AI to automate tedious back-office tasks, detect fraud, and improve customer service.

Of course, just because we are seeing a shift towards more practical applications of AI doesn't mean that the technology isn't still exciting. There are still plenty of opportunities for companies to develop groundbreaking AI applications that could transform entire industries. However, the focus is shifting away from the hype and towards more tangible benefits.

It is clear that the hype around AI will be tempered by companies become more cautious about how they spend their money. This will lead to a shift towards more practical applications of the technology, with a focus on delivering tangible benefits. While there are still plenty of opportunities for companies to develop groundbreaking AI applications, the focus is now on solving real-world problems rather than just chasing the next big thing