What kind of ROI do you get from Generative AI?

Computerworld.com reported “Many organizations have experienced atrocious ROI for generative AI efforts, but that’s because they’ve been thinking the wrong way about both genAI and the kind of ROI they can expect from it.” The July 18, 2024 article entitled “Want ROI from genAI? Rethink what both terms mean” (https://www.computerworld.com/article/2517737/want-roi-from-genai-rethink-what-both-terms-mean.html) included these comments:

 Patrick Byrnes, formerly senior consultant for AI at Deloitte and now an AI consultant for DataArt, attributes some of the inflated ROI expectations for generative AI projects to the impressive performance delivered by the earliest genAI applications.

 “If you go into Gemini or ChatGPT and ask it something basic, you can get an incredible response right away,” he said. Expecting similar results on a larger scale, “some enterprises did not start small. Right out of the gate, they went with high-impact customer facing efforts.”

 Indeed, many of the ROI shortcomings with genAI deployments are a result of executives not thinking through the rollout implications sufficiently, according to an executive in the AI field who asked that her name and affiliation not be used.

 “Automation driven by AI leads to productivity gains, but often the cost to enable it is overlooked,” she said. “Enterprises focus on model development, training, and system infrastructure but don’t accurately account for cost of data prep. They spin up massive data sets for AI, but small errors can make it useless, which also leads employees to mistrust outputs, leading to costs without ROI.”

 Another overlooked factor, she noted, is that many AI vendors are currently focused on customer acquisition, keeping costs down in the short term. “Then they will ratchet up prices with an eye toward profitability, which will lead to higher costs for enterprise users in the future.”

 Interesting! What do you think?