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Business Standard
05-06-2025
- Business
- Business Standard
Tech firms must embrace AI fast or risk falling behind: KPMG report
The artificial intelligence (AI) boom is here, and tech companies need to act fast or risk losing competitive advantage, according to a recent report by KPMG International. According to The Intelligent Tech Enterprise report, while expectations and spending around AI are soaring, many tech firms around the world have yet to unlock the full value of their investments. The study surveyed 1,390 executives globally, including 183 from the tech sector, and drew on over 500 AI engagements conducted by KPMG. It found that while 88 per cent of technology leaders believe AI adoption is crucial for competitive advantage, only 47 per cent are currently seeing significant returns. Shareholder pressure is mounting, with 62 per cent of tech firms under increasing demand to deliver immediate results. Yet, even AI front-runners are struggling to scale their efforts effectively. Many companies lack a coherent AI strategy, the necessary infrastructure, or mechanisms to build trust in AI systems. Only 27 per cent reported having a 'transformational AI vision', and just 20 per cent have fully integrated AI into their broader business strategy. 'AI is triggering the biggest transformation wave the economy has ever seen. You want to be on the right side of that,' said Stanford professor Erik Brynjolfsson, who contributed to the report. AI opportunities remain untapped The report estimates the potential value of AI for 832 public tech companies at over $178 billion annually. This represents up to 16 per cent of earnings before interest, taxes, depreciation, and amortisation (Ebitda) for some firms, particularly in areas like customer analytics, operations execution and code generation. Still, KPMG noted a significant gap between what's possible and what's being achieved. While 70 per cent of respondents reported cost savings from AI, and 47 per cent cited high returns, challenges persist. Common barriers include data privacy concerns, talent shortages, and limited AI literacy across organisations. Just 44 per cent have clear plans for scaling AI or tracking its performance. 'This is likely to be the largest organisational change most firms will face,' the report states. 'You need a clear plan—and the courage to execute it.' India's tech sector ready to leap India's tech sector is ready to accelerate its AI adoption, according to Purushothaman KG, Partner and Head of Technology Transformation at KPMG in India. 'Eighty-one per cent of Indian tech firms plan to embed AI into products and services over the next year,' he said, highlighting the importance of strong governance, skilled talent and deep operational integration. With 63 per cent of Indian firms planning to increase AI spending by more than 10 per cent, the country has the potential to redefine its global competitiveness in the AI era. What should tech leaders do? To help tech companies close this gap, KPMG recommends five key actions: Develop a clear AI strategy with a solid business case and roadmap that can evolve as technology and markets change. Build trust in AI by using ethical frameworks, transparency tools, and systems that explain how decisions are made. Make products smarter by designing them with AI from the start and constantly improving them based on user feedback. Upgrade tech infrastructure, especially with intelligent cloud services and edge computing that bring data closer to where AI models run. Embed AI in day-to-day operations and encourage teams and customers to adopt and work with AI solutions. Grow with AI: Enable, embed, evolve The report also lays out a three-phase roadmap for companies looking to grow with AI:
Mint
26-04-2025
- Business
- Mint
Companies are struggling to drive a return on AI. It doesn't have to be that way.
AI adoption among companies is stunningly high, but most of them are struggling to put it to good use. They intuit that AI is essential to their future. Yet intuition alone won't unlock the promise of AI, and it isn't clear to them which key will do the trick. As of last year, 78% of companies said they used artificial intelligence in at least one function, up from 55% in 2023, according to global management consulting firm McKinsey's State of AI survey, released in March. From these efforts, companies claimed to typically find cost savings of less than 10% and revenue increases of less than 5%. While the measurable financial return is limited, business is nonetheless all-in on AI, according to the 2025 AI Index report released in April by the Stanford Institute for Human-Centered Artificial Intelligence. Last year, private generative AI investment alone hit $33.9 billion globally, up 18.7% from 2023. The numbers reflect a 'productivity paradox," in which massive improvements in AI capabilities haven't led to a corresponding surge in national-level productivity, according to Stanford University economist and professor Erik Brynjolfsson, who worked on the AI Index. While some specific projects have been enormously productive, 'many companies are disappointed with their AI projects." For companies to get the most out of their AI efforts, Brynjolfsson advocates for a task-based analysis, in which a company is broken down into fine-grained tasks or 'atomic units of work" that are evaluated for potential AI assistance. As AI is applied, the results are measured against key performance indicators, or KPIs. He co-founded a startup, Workhelix, that applies those principles. Companies should take care to target an outcome first, and then find the model that helps them achieve it, says Scott Hallworth, chief data and analytics officer and head of digital solutions at HP. A separate report from McKinsey issued in January helps explain why AI adoption is racing ahead of associated productivity gains, according to Lareina Yee, senior partner and director at the McKinsey Global Institute. Only 1% of U.S. companies that have invested in AI report that they have scaled their investment, while 43% report that they are still in the pilot stage. 'One cannot expect significant productivity gains at the pilot level or even at the company unit level. Significant productivity improvements require achieving scale," she said. The critical question then, is how companies can best scale their AI efforts. Ryan Teeples, chief technology officer of 1-800Accountant, agrees that 'breaking work into AI-enabled tasks and aligning them to KPIs not only drives measurable ROI, it also creates a better customer experience by surfacing critical information faster than a human ever could." The privately held company based in New York provides tax, booking and payroll services to 50,000 active clients, with a focus on small businesses. The company isn't a Workhelix customer. Additionally, he says, companies should look beyond individualized AI usage, in which employees use GenAI chatbots or AI-equipped productivity tools to enhance their work. 'True enterprise adoption…involves orchestration and scaling across the organization. Very few organizations have truly reached this level, and even those are only scratching the surface," he said. The use of AI at 1-800Accountant begins with an assessment of whether the technology improves the client experience. If the AI provides customers with answers that are as good, better or faster than a human, it's a good use case, according to Teeples. In the past, the company scheduled hourlong appointments with advisers who answered simple client questions, such as the status of their tax return. Now, the company uses an AI agent connected to curated data sources to address 65% of customer inquiries, with 30% arranging a call with a human. (The remaining 5% drop out of the inquiry process for various reasons.) The company uses Salesforce's Agentforce to handle customer inquiries and its Einstein platform for orchestration across 1-800Accountant's back end. Teeples said the company is saving money on the cost of human advisers. 'The ROI in this case was abundantly clear," he said. Orchestrating AI across the enterprise requires the right infrastructure, especially when it comes to data, according to Gabrielle Tao, senior vice president for data cloud at Salesforce. It is important, she said, to harmonize data, for example, by creating a consistent way to refer to business concepts such as 'orders" and 'transactions," regardless of the underlying data source. AI deployments should target tasks that are both frequent and generalizable, according to Walter Sun, global head of artificial intelligence at SAP. Infrequent, highly specific tasks such as a marketing campaign for a single event might benefit from AI, but applying AI to regularly occurring tasks will achieve a more consistent ROI, he said. Historically, it has taken years for the world to figure out what to do with revolutionary general-purpose technologies including the steam engine and electricity, according to Brynjolfsson. It isn't unusual for general-purpose models to follow a 'J-curve," in which there's a dip in initial productivity, as businesses figure things out, followed by a ramp-up in productivity. He says companies are beginning to turn the corner of the AI J-curve. The transformation may occur faster than in the past, because businesses—under no small amount of pressure from investors—are working to quickly justify the massive amount of capital pouring into AI. Write to Steven Rosenbush at
Trade Arabia
03-04-2025
- Business
- Trade Arabia
Aveva seals strategic partnerships at flagship US event
Aveva, a global leader in industrial software, driving digital transformation and sustainability, is announcing multiple new partnerships at its flagship event, Aveva World. Taking place this year in San Francisco, Aveva is partnering with data analytics group Databricks and cutting-edge material tracking and mobility solution provider Track'em to revolutionise industrial operations with a secure and open approach to data and AI. The strategic partnership with Track'em is aimed at helping deliver real time visibility and cost control in capital projects. Hosted from April 8 to 10, the three-day conference features over 160 global speakers including Stanford Professor Erik Brynjolfsson, CEO of Schneider Electric, Olivier Blum, and CEO of Archaea Energy, Starlee Sykes, as well as many other business leaders. The event includes over 150 breakout sessions across 12 industries, discussing how industrial intelligence is enabling companies to analyse, visualise, and contextualise their data to improve decision-making, build resilience, and enhance sustainability across the enterprise. Additionally, Aveva will be unveiling new portfolio capabilities as it looks to tackle pressing industry challenges within artificial intelligence, energy transition and digital transformation. Through innovations within generative AI for piping design, Aveva is accelerating design productivity, reducing project set-up time by 70%, and cutting installed costs by 15%. Aveva is also empowering users with AI-powered tools on the Connect platform, enabling smarter processing and summarising of large datasets, while boosting multi-site visibility with hybrid operations control. With seamless industrial AI deployment across the entire lifecycle, Aveva helps businesses minimise risk, maximise outcomes, improve energy management and rapidly drive value with greater speed and efficiency. "Aveva World 2025 will bring together customers and partners to discuss how radical collaboration can unlock innovation and drive sustainable value," remarked Rob McGreevy, the Chief Product Officer, Aveva. "Ahead of this year's event, we are announcing partnerships with Databricks and Track'em, demonstrating how working with experts in their respective fields further strengthens our product offerings and drives additional value for our customers," he stated. "By combining real-time tracking with digital project execution, Aveva and Track'em are paving the way for a smarter, more efficient, and cost-effective future in capital projects. Our partnership with Databricks can help bridge the gap between IT and OT through Artificial Intelligence (AI); unlocking new potential for data-driven decision-making," he added.
Tahawul Tech
03-04-2025
- Business
- Tahawul Tech
AVEVA announces strategic partnerships at flagship event AVEVA World in San Francisco
AVEVA, a global leader in industrial software, driving digital transformation and sustainability, is announcing multiple new partnerships at its flagship event, AVEVA World. Taking place this year in San Francisco, AVEVA is partnering with Databricks to revolutionise industrial operations with a secure and open approach to data and AI. AVEVA is also announcing a strategic partnership with Track'em, a cutting-edge material tracking and mobility solution provider, to deliver real time visibility and cost control in capital projects. Hosted from 8-10th April, the three-day conference will feature over 160 global speakers including Stanford Professor Erik Brynjolfsson, CEO of Schneider Electric, Olivier Blum, and CEO of Archaea Energy, Starlee Sykes, as well as many other business leaders. The event includes over 150 breakout sessions across 12 industries, discussing how industrial intelligence is enabling companies to analyse, visualise, and contextualise their data to improve decision-making, build resilience, and enhance sustainability across the enterprise. Additionally, AVEVA will be unveiling new portfolio capabilities as it looks to tackle pressing industry challenges within artificial intelligence, energy transition and digital transformation. Through innovations within generative AI for piping design, AVEVA is accelerating design productivity, reducing project set-up time by 70%, and cutting installed costs by 15%. AVEVA is also empowering users with AI-powered tools on the CONNECT platform, enabling smarter processing and summarising of large datasets, while boosting multi-site visibility with hybrid operations control. With seamless industrial AI deployment across the entire lifecycle, AVEVA helps businesses minimise risk, maximise outcomes, improve energy management and rapidly drive value with greater speed and efficiency. 'AVEVA World 2025 will bring together customers and partners to discuss how radical collaboration can unlock innovation and drive sustainable value. Ahead of this year's event, we are announcing partnerships with Databricks and Track'em, demonstrating how working with experts in their respective fields further strengthens our product offerings and drives additional value for our customers. By combining real-time tracking with digital project execution, AVEVA and Track'em are paving the way for a smarter, more efficient, and cost-effective future in capital projects. Our partnership with Databricks can help bridge the gap between IT and OT through Artificial Intelligence (AI); unlocking new potential for data-driven decision-making' said Rob McGreevy, Chief Product Officer, AVEVA. AVEVA's transformational collaboration with Databricks integrates CONNECT, AVEVA's industrial intelligence platform, with Databricks' Data Intelligence Platform, unifying industrial and enterprise data. It empowers businesses to leverage AI, predictive capabilities, and Generative AI applications, driving faster insights, optimised efficiency, advanced forecasting, and accelerated digital transformation — all through unified and secure data across major cloud platforms. This collaboration will drive sustainable, data-driven growth in an increasingly interconnected world. 'As demand for data intelligence grows, we're excited to partner with AVEVA to deliver a solution that enhances organisations' ability to collaborate, seamlessly share data across platforms, clouds, and regions, and navigate the complexity of custom solutions', said Shiv Trisal, Global Manufacturing, Transportation and Energy Leader, Databricks. 'Together, we are empowering customers to extract maximum value from their data while ensuring secure data governance at scale, driving innovation across industrial operations'. AVEVA is also collaborating with Track'em, to bring significant enhancements to AVEVA™ Enterprise Resource Management (ERM) capabilities. This will include real-time material tracking and traceability, mobility reintroduction, future warehouse management capabilities and cloud-only solutions. This partnership will expand the capabilities of AVEVA ERM to both new and existing clients, strengthening supply chain visibility, procurement, and project execution. 'Our mission is to eliminate inefficiencies in construction and capital projects', said Track'em Founder and CEO Kashif Saleem. 'Partnering with AVEVA strengthens our ability to provide customers with real-time tracking and enhanced decision-making, reducing delays and cost overruns'. For further details please visit here. Image Credit: AVEVA
Jordan Times
06-02-2025
- Business
- Jordan Times
Three reasons why AI's momentum could stall in 2025
LONDON – The rapid pace of technological advances over the past year, especially in artificial intelligence, has provided many reasons for optimism. But as we head into 2025, there are signs that AI's momentum may be waning. Since 2023, the dominant narrative has been that the AI revolution will drive productivity and economic growth, paving the way for extraordinary technological breakthroughs. PwC, for example, projects that AI will add nearly $16 trillion to global GDP by 2030, a 14 per cent increase. Meanwhile, a study by Erik Brynjolfsson, Danielle Li, and Lindsey R. Raymond estimates that generative AI could boost worker productivity by 14 per cent on average and by 34 per cent for new and low-skilled workers. Recent announcements by Google and OpenAI seem to support this narrative, offering a glimpse into a future that not long ago was confined to science fiction. Google's Willow quantum chip, for example, reportedly completed a benchmark computation, a task that would take today's fastest supercomputers ten septillion years (ten followed by 24 zeros), in under five minutes. Likewise, OpenAI's new o3 model represents a major technological breakthrough, bringing AI closer to the point where it can outperform humans in any cognitive task, a milestone known as 'artificial general intelligence.' But there are at least three reasons why the AI boom could lose steam in 2025. First, investors are increasingly questioning whether AI-related investments can deliver significant returns, as many companies are struggling to generate enough revenue to offset the skyrocketing costs of developing cutting-edge models. While training OpenAI's GPT-4 cost more than $100 million, training future models will likely cost more than $1 billion, raising concerns about the financial sustainability of these efforts. To be sure, investors are eager to capitalise on the AI boom, with venture capital firms investing a record $97 billion in US-based AI startups in 2024. But it appears that even industry leaders like OpenAI are burning through cash too quickly to generate meaningful returns, leading investors to worry that much of their capital has been misallocated or wasted. A back-of-the-envelope calculation suggests that a $100 billion investment in AI would require at least $50 billion in revenue to produce an acceptable return on capital, accounting for taxes, capital expenditures, and operating expenses. But the entire sector's annual revenues, according to my sources, total just $12 billion, with OpenAI accounting for roughly $4 billion. In the absence of a 'killer app' for which customers are willing to pay substantial sums, a significant portion of VC investments could end up worthless, triggering a decline in investment and spending. Second, the enormous amounts of energy required to operate and cool massive data centers could impede AI's rapid growth. By 2026, according to the International Energy Agency, AI data centers will consume 1,000 terawatt-hours of electricity annually, exceeding the United Kingdom's total electricity and gas consumption in 2023. The consultancy Gartner projects that by 2027, 40 per cent of existing data centers will be 'operationally constrained' by limited power availability. Third, large language models appear to be approaching their limits as companies grapple with mounting challenges like data scarcity and recurring errors. LLMs are primarily trained on data scraped from sources such as news articles, published reports, social media posts, and academic papers. But with a finite supply of high-quality information, finding new datasets or creating synthetic alternatives has become increasingly difficult and costly. Consequently, these models are prone to generating incorrect or fabricated answers ('hallucinations'), and AI companies may soon run out of the fresh data needed to refine them. Computing power is also approaching its physical limits. In 2021, IBM unveiled a two-nanometer chip, roughly the size of a fingernail, capable of fitting 50 billion transistors and improving performance by 45 per cent compared to its seven-nanometer predecessor. While undeniably impressive, this milestone also raises an important question: Has the industry reached the point of diminishing returns in its quest to make ever-smaller semiconductors? If these trends persist, the current valuations of publicly traded AI companies may not be sustainable. Notably, private investment is already showing signs of declining. According to the research firm Preqin, VC firms raised $85 billion in the first three quarters of 2024, a sharp drop from the $136 billion raised during the same period in 2023. The good news is that should today's AI giants start to falter, smaller competitors could seize the opportunity and challenge their dominance. From a market standpoint, such a scenario could foster increased competition and reduce concentration, preventing a repeat of the conditions that allowed the so-called 'Magnificent Seven', Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla, to dominate the US tech industry. Dambisa Moyo, an international economist, is the author of four New York Times bestselling books, including 'Edge of Chaos: Why Democracy Is Failing to Deliver Economic Growth – and How to Fix It' (Basic Books, 2018). Copyright: Project Syndicate, 2025.
