September2024StateoftheGenerativeAIMarketIntroductionStateoftheMarketGenAIImplementationRoadmapDifferentiationinaWorldofGenAI©2024InformationServicesGroup,Inc.AllRightsReserved.22024StateoftheGenerativeAIMarket|TableofContents3Introduction4StateoftheMarket5MarketAdoptionbytheNumbers6KeyUseCases:TodayandTomorrow8What’sNext9ThePilot-to-ProductionDilemma10TransformingSoftwareDevelopment11GenAIImplementationRoadmap12ImpactsonBothBusinessandIT13GenAIfortheBusiness14GenAIforIT–AILandingZones16GenAIforIT–AIOps17BuyingfortheEnterprise17BuyingAIImplementationServices19KeyConsiderationswhenBuyingAIToolsorPlatforms21DataMatters21DataPlatformstoSupportGenAI23DataGovernanceandDataEngineering25NavigatingToughTerrain25RisksofGenAIfortheEnterprise26AICompliance:AGlobalPerspective27NewFrontiersofAIGovernance29EthicalApproachestoGenAI30DifferentiationinaWorldofGenAI32KeyContributorsDropusalineandlet’stalk.3StateoftheMarketGenAIImplementationRoadmapDifferentiationinaWorldofGenAI2024StateoftheGenerativeAIMarket|©2024InformationServicesGroup,Inc.AllRightsReserved.IntroductionIntroductionIthasbeenalmosttwoyearssincegenerativeAI(GenAI)emergedwithforceontothetechnologylandscape,andtwothingsarenowclear.First,GenAIwillsignificantlyimpactandtransformeveryindustry—itisjustamatteroftime.Second,wearestillintheearlystagesofadoptionandtherearesignificantchallengestoharnessingthepowerofGenAIduringthistransition.Whilethereisclearlyanabundanceofhype,itisalsoclearthatthistrulywilldrivedramaticchange,presentingopportunitiesandrisksforeveryenterprise.Inmanyways,itissimilartothelate1990swhentheinternetwasyoungandtherewasmuchweedingoutandgrowingneeded.This2024StateoftheGenAIMarketreportwillguideyouandyourenterpriseonthekeythemesanddevelopmentsthatareshapingthelandscape,highlightingboththesuccessesandtheobstaclesforsuccessfullynavigatingthiscrucialnewtechnology.OneofthemostnotabletrendsintheGenAImarketistheincreasingsophisticationandaccessibilityofGenAImodels.Whileadvancementsindeeplearningalgorithmsandcomputationalresourceshaveenabledthesemodelstobetterunderstandandgeneratecomplexcontentacrossvariousdomains,therealityisthatleveragingthesecapabilitieseffectivelyisfarfromstraightforward.ItisimperativeforbusinessestoapproachGenAIprojectswitharealisticunderstandingofthepotentialpitfalls,investinginthenecessaryexpertiseandinfrastructuretorealizeitsbenefitsresponsibly.Fromnaturallanguageprocessingandimagesynthesistoautomatedcodegeneration,enterprisesfacechallengesinintegratingGenAIsolutionsintotheirexistingworkflows,ensuringdataqualityandmanagingthecostsassociatedwiththesetechnologies.Tohelpaddressthecostissue,morethanhalfofthesoftwareprovidersevaluatedinourGenAIBuyersGuidehaveimplementedsomeformofcostcontrolandmosthaveinformedusoffurtherplansinthisarea.TherapidadoptionofGenAIalsobringsothernewchallengestotheforefront.ItisprovingverydifficultforenterprisestohireordeveloptheAIskillstheyneedamongtheirteams.Concernssuchasdataprivacy,algorithmicfairnessandthepotentialformisusehavebecomemoreprominent,promptingtheneedforrobustgovernanceframeworksandexplicitethicalguidelines.Manyenterprisesfindthemselvesill-equippedtonavigatethesecomplexities,riskingunintendedconsequencesandnegativeimpacts.Byacknowledgingandaddressingthesechallenges,enterprisescanmakemoreinformeddecisionsanddrivemeaningfulprogressinanevolvinglandsc...