GenAI crowned top opportunity for tech businesses in 2024 by EY

Generative artificial intelligence (GenAI) integration has emerged as the greatest opportunity for technology businesses for 2024, following a buoyantly positive outlook for the technology industry, which saw a dramatic rebound from the weak start of 2023. According to EY's ranking on 'Top 10 opportunities for technology companies in 2024', strategies based on GenAI are set to be a game-changer for the sector, fueling the industry's resurgence. Yet, the report underlined that most companies are at the early stages of AI maturity, with 90% of organisations still in the nascent phase.

Ken Englund, EY Americas TMT Leader, stated, "In 2023 the technology industry navigated global economic headwinds and geopolitical tensions, while building widespread expectation around the potential of AI. By putting AI at the centre of their strategies, technology businesses could leapfrog competitors." Indeed, GenAI integration offers the possibility of 'accelerating their transformation journeys but also repositioning operations to capitalise on rapidly emerging technologies and business models'.

Notably the second-ranked opportunity highlighted by the report is the utilisation of GenAI in targeted front-office and back-office trials. Joongshik Wang, EY Asean Technology, Media & Entertainment and Telecommunications Sector Leader, noted that several technology firms are 'experimenting in areas where there is already proven track record, such as customer care, IT development, marketing and sales' while more advanced companies are pursuing 'more ambitious technological breakthroughs' like 'enterprise order fulfilling, digital twins, supply chain optimisation, energy efficiency, and self-healing networks'.

Wang however, flagged potential risks, "While GenAI offers great opportunities to accelerate, complement or replace some of the traditional white-collar tasks, the outcome of GenAI-based solutions can be less predictable with the variations of answers and bring additional risks. Hence, careful solution design and additional controls are needed to achieve the desired level of product maturity."

Defining the corporate investment strategy around the AI roadmap has also been pointed out as being crucial to a successful transition to AI-based operations. Olivier Wolf, EY-Parthenon Global TMT Leader, observed the growing attraction of business models based on existing AI ecosystems, suggesting that expansion would be best achieved 'through a blend of small- to medium-sized acquisitions, corporate investments and partnerships, that would help companies access intellectual property and the skills needed to develop new propositions quickly'.

Aside from AI-centric opportunities, diversification of supply chains through expanded operations in emerging markets has also been spotlighted. The prospect of establishing additional supply chains in these areas would serve to mitigate geopolitical disruption, particularly pertinent for hardware-focused businesses. Moreover, the report noted the rising importance of prioritising energy efficiency in data centres as the demand for AI escalates. By 2027, it is estimated that AI could consume as much electricity as a mid-sized nation, therefore innovative power solutions are a key priority for tech businesses.