What you need to know

• 72 per cent of decision-makers use Gen AI at least weekly in 2024, compared to 37 per cent in 2023.
• Organisations are significantly increasing their Gen AI budgets, with average spending rising from US$4.5 million in 2023 to US$10.3 million in 2024.
• Decision-makers report feeling “pleased,” “excited” and “optimistic” about Gen AI, with negative sentiments like “sceptical” and “worried” decreasing.
• The most common applications of Gen AI are in document writing/editing (64 per cent), data analysis (62 per cent), and document summarisation (59 per cent).
• More than 45 per cent of companies have dedicated teams for Gen AI strategy, and 46 per cent have appointed Chief AI Officers (CAIO).
• Concerns about accuracy, bias, data privacy, and team integration persist, although the intensity of these concerns has slightly softened compared to last year.
• While spending is expected to continue increasing, growth rates may slow as companies seek to validate their initial investments and identify effective use cases.

Marketing provides some of the top early use cases for the adoption of generation AI, according to a recent report by AI Wharton Business School’s AI at Wharton report titled Growing Up: Navigating Gen AI’s Early Years.

The study, which was produced in partnership with GBK Collective, a marketing consultancy with strong bonds to academia, looked at trends inside organisations with more than 1000 employees. It highlights a significant increase in both usage and positive sentiment towards Gen AI as organisations seek to harness its potential for improving efficiency and innovation.

Noting that almost three-quarters of decision-makers report using Gen AI at least once a week, the authors say this has almost doubled in a year, rising from just 37 per cent in 2023. The shift comes as companies move past the initial excitement surrounding the technology and focus on proving its return on investment (ROI), they say. 

According to Stefano Puntoni, Sebastian S. Kresge Professor of Marketing at the Wharton School and Co-Director of AI at Wharton, “This transition from experimentation to widespread usage marks a pivotal moment”.

“Companies are now leveraging AI for tangible business outcomes, but they’re also facing new challenges in governance and integration as they scale AI solutions across the enterprise," he said.

As businesses explore various applications of Gen AI, they are increasingly optimistic about its role in enhancing productivity rather than replacing human workers.

However, while enthusiasm grows, organisations still face challenges, such as concerns about accuracy, data privacy and ethical implications. The Wharton Business School report outlines a need for clearer usage policies as more companies adopt Gen AI technologies.

As maturity rises, the authors also say businesses need to remain vigilant and adaptable, seeking effective applications while navigating the inherent risks of this transformative technology.

Follow the money

The report highlights the average budget for Gen AI solutions has more than doubled from US$4.5 million in 2023 to US$10.3 million in 2024. This dramatic increase reflects a broader trend among businesses to invest seriously in technology that promises to enhance productivity and operational efficiency.

Despite the enthusiasm, organisations are approaching their future spending with caution. While 72 per cent of decision-makers anticipate an increase in Gen AI budgets over the next year, most expect that growth to slow down, with increases projected to be modest—between one per cent to 10 per cent. This tempered optimism suggests companies are still searching for clear ROI from their initial investments, indicating a shift from aggressive spending to more strategic allocation of resources.

The report also notes the top spending areas for Gen AI include technology tools, employee training, hiring and consulting services. Training investments, however, appear to be on the decline, potentially reflecting a “wait-and-see” mentality as firms validate the utility of Gen AI before committing to costly internal training initiatives.

Moreover, the organisational structure around Gen AI is evolving. Over 45 per cent of companies surveyed reported having dedicated internal teams focused on Gen AI strategy, with an impressive 46 per cent hiring Chief AI Officers (CAIOs) to steer these initiatives.

Interestingly, the report reveals smaller enterprises (those with annual revenues between $50 million and $250 million) are leading the charge in Gen AI adoption, with 80 per cent reporting they use Gen AI at least once a week. This contrasts sharply with larger organisations, which often face bureaucratic hurdles that can slow down the implementation of new technologies.

In terms of functionality, Gen AI is currently being utilised across various departments, with document writing, data analysis and customer support leading the way. However, the sentiment around Gen AI’s impact varies by department, as many leaders still view its effect as low to moderate, particularly outside of IT.

According to the report, the successful adoption of Gen AI will hinge on identifying the right use cases and ensuring investments align with the changing needs of the business. Decision-makers are encouraged to think critically about which vendors to partner with, as the competitive landscape is rapidly shifting.

Top Use cases

“Generative AI has rapidly evolved from a tool of experimentation to a core driver of business transformation,” said Puntoni. “Companies are no longer just exploring AI’s potential, they are embedding it into their strategies to scale growth, streamline operations and enhance decision-making. The novelty phase is over. We’re now starting to see the integration of AI into various business processes, as companies look to unlock its long-term value across the enterprise.”

Marketing is revealed as a key early adopter in the report, accounting for two of the top five use cases. These include:

• Marketing Content Creation (58 per cent): In the competitive landscape of marketing, Gen AI is helping businesses generate creative content quickly, from ad copy to social media posts.
• Personalised Marketing and Advertising (58 per cent): Companies are utilising Gen AI to tailor marketing strategies to individual customers, enhancing engagement and conversion rates.
• Document and Proposal Writing/Editing (64 per cent): Companies are harnessing Gen AI to streamline the writing process, allowing for faster and more efficient document preparation.
• Data Analyses and Analytics (62 per cent): Organisations are employing Gen AI for data analysis, enabling them to derive insights and make data-driven decisions more effectively.
• Document/Meeting Summarisation (59 per cent): Gen AI is being used to distil long documents and meeting notes into concise summaries, saving time for employees.

These use cases highlight Gen AI's versatility and its ability to augment various functions within organisations. The report indicates while Gen AI is widely adopted, its perceived impact varies across sectors. For instance, 58 per cent of respondents believe Gen AI has a high impact on information technology (IT), indicating a strong alignment with tech-driven processes.

Concerns about the accuracy of generative AI, along with issues such data privacy, and ethical implications remain prevalent. However, the intensity of these concerns has softened as businesses begin to see the tangible benefits of implementing Gen AI solutions. The report authors also believe as organisations continue to explore and experiment with Gen AI, they are likely to uncover new applications and refine existing ones. This phase of experimentation is crucial for identifying effective use cases that can lead to measurable returns on investment.

Embracing these technologies, the focus will shift towards maximising their potential and addressing the challenges that come with them, the report authors added.