Why ‘predictive’ generative AI is the smart bet for real returns

The AI investment landscape: The artificial intelligence sector is experiencing significant growth, with over $1 trillion in expected capital expenditures on AI infrastructure, yet questions remain about the real return on investment for businesses.

• Businesses are seeking to separate hype from real value as they navigate the rapidly evolving AI landscape.
• A recent Goldman Sachs Exchanges podcast featured a debate between MIT economist Daron Acemoglu and Goldman Sachs Research’s Jim Covello on whether generative AI can live up to its massive potential.
• Joseph Briggs of Global Economics Research suggests AI could boost U.S. productivity by 9% over the next decade, while Acemoglu remains cautious, arguing that only 5% of tasks will be impacted by AI in the near future.

Predictive generative AI emerges as a frontrunner: Among various AI innovations, predictive generative AI is already delivering measurable value across industries, positioning itself as a leading technology for businesses seeking tangible returns.

• Unlike traditional generative AI that focuses on content creation, predictive generative AI forecasts trends, optimizes decision-making, and transforms business operations.
• The finance industry has seen significant benefits, with predictive generative AI optimizing trading strategies, improving decision-making, and detecting fraud.
• A leading Asian bank utilized predictive generative AI to streamline sustainability assessments, reducing task completion times by 90%.

Healthcare sector reaps benefits: The healthcare industry has witnessed impressive results from the implementation of predictive generative AI, leading to improved patient outcomes and more efficient treatments.

• The Cleveland Clinic is using predictive generative AI to forecast patient outcomes in cardiac care, enabling earlier interventions.
• Stanford Medicine has implemented a predictive algorithm to revolutionize brain tumor treatment, maximizing tumor destruction while protecting healthy tissue.

Cross-industry applications: Predictive generative AI is proving its worth across various sectors, from human-centric industries to highly technical fields.

• CAA Club Group leverages predictive generative AI to forecast roadside assistance demand, allowing for more efficient resource deployment.
• In retail, companies like Amazon use predictive models to manage inventory and personalize customer experiences, streamlining operations and boosting customer loyalty.
• Despite these benefits, trust remains a challenge, with many retailers still hesitant to fully adopt AI solutions, according to Deloitte.

Strategic investment focus: As businesses navigate the AI landscape, focusing investments on technologies with proven track records of delivering real-world value, such as predictive generative AI, is crucial.

• With estimates suggesting that only 4.5-4.6% of tasks will be automated in the short term, human oversight remains critical in AI implementation.
• Smart businesses are prioritizing investments in predictive generative AI to generate immediate returns while preparing for AI’s long-term potential.

Balancing present and future: While the future of AI holds immense potential, businesses must focus on technologies that consistently deliver measurable results in the present.

• Predictive generative AI is already transforming industries by driving operational efficiencies and boosting profitability.
• This strategic approach ensures that companies can capitalize on AI’s current capabilities while positioning themselves for future advancements in the field.