by If 2023 is the year companies put money into generational AI, 2024 is the year they hope those investments will pay off. From Microsoft (MSFT) and Google (GOOG, GOOGL) to Samsung and even Volkswagen and Mercedes, businesses are quickly monetizing their AI-powered offerings as interest in the technology among consumers and enterprise customers remains red hot.
“We expect 2024 to be a year of increased promotion and initial adoption and 2025-27 to be where the markets may opt out of additional applications to take advantage of the features as they become available many key elements together,” said analysts at UBS Global Research and Evidence. Lab wrote in an investor note on Monday.
On Wednesday, Samsung unveiled its line of Galaxy S24 smartphones along with a suite of company-generation AI capabilities including live translation and photo editing features. On Monday, Microsoft announced that it will begin selling subscriptions for a consumer version of its Copilot AI assistant for $20 per month per user.
The tech giant also said it is opening up the enterprise version of its Copilot for Microsoft 365 to small and medium-sized businesses. Previously it only sold the service to businesses with more than 300 employees.
Intel ( INTC ), Nvidia ( NVDA ), AMD ( AMD ), and Qualcomm ( QCOM ) are selling chips with their own neural processing units for AI apps; PC makers are joining the fray by marketing their laptops and desktops as AI ready; and at CES 2024 Volkswagen said it is bringing ChatGPT to its in-car voice assistant by the middle of the year.
Now companies just need buy-in from consumers.
“Is there a killer app? Is there a demonstrable request or change that will essentially make people pay more? I think that is something [companies] to struggle with,” Gartner analyst Ranjit Atwal told Yahoo Finance.
But that’s not stopping businesses from taking a chance on what could be the next big technological leap.
Time to put up
If you followed the developments at CES 2024 earlier this month, you know that every tech-savvy company in the world is using AI as a means to market their products.
Now it’s up to the companies making true AI products to deliver on the promise that the technology will truly change our lives for the better.
The problem for companies, says Atwal, is that AI-generated products offer consumers cumulative benefits rather than a single mind app that’s easy for people to sell.
“It’s a combination of elements that … will make the device easier to use. It will make you more productive. So everything becomes cumulative,” he said. “It’s very difficult to monetize cumulative money.”
While selling the average consumer on AI-generated products may be tough, enterprise customers are already on board.
According to Microsoft VP and chief consumer marketing officer Yusuf Mehdi, 77% of people in enterprises who used the company’s Copilot business software say they wouldn’t want to give it up. Microsoft’s Copilot for Microsoft 365 currently costs $30 per month, the same price as Google’s own enterprise offering, Duet AI for Workspace Enterprise.
Microsoft’s Copilot Pro will test consumer appetite for paid generation AI services. So will the so-called AI PC, the PC industry’s marketing designation for laptops and desktops equipped with neural processing units designed to power AI applications.
For now, chipmakers like Intel say neural processors will benefit the average consumer by running AI-generated apps on their personal devices rather than in the cloud, helping to improve overall privacy and security.
But after that, they say we’ll have to wait and see what kind of apps developers cook up before we know what AI PCs are really capable of.
However, according to the UBS Global Research and Evidence Lab, it’s only a matter of time before consumers get on board.
“We think the motivations, the use cases and the technology enablers for [generative AI] edge devices are aligning for initial high-end adoption in 2024 and mainstream penetration from 2025-27,” UBS analysts wrote in a research document.
“This could encourage positive mix changes [spending on higher priced products] (driving requirements for more processing, storage and upgraded peripherals), and they may also draw in replacement cycles as new devices provide more utility, enabling content creation, productivity and personalization.”
It is now up to tech companies to retain customers interested in the benefits of generational AI if they hope to make any return on their investments.
Daniel Hawley He is the technology editor at Yahoo Finance. He has been covering the tech industry since 2011. You can follow him on Twitter @Daniel Howley.
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