Let's dive deeper into an entire ecosystem created by Generative AI, from hardware providers to application builders, that will help bring its potential for business to fruition. Just to refresh our knowledge: generative AI is a subset of AI that uses algorithms to generate new content, such as images, music, and text, that mimics human creativity.

As the development and deployment of generative AI systems gets under way, a new value chain is emerging to support the training and use of this powerful technology. Briefly, one might think it's quite similar to a traditional AI value chain. After all, of the six top-level categories—computer hardware, cloud platforms, foundation models, model hubs and machine learning operations (MLOps), applications, and services—only foundation models are a new addition here.

Still, there are a lot of challenges associated with generative AI. One of the main challenges is the lack of quality data available for training models. This is especially true for industries such as healthcare, where data privacy regulations limit the amount of data that can be collected and used for training models. Another challenge is the complexity of the models themselves. Generative AI models are often composed of multiple neural networks, making them difficult to understand and troubleshoot. This complexity also makes it challenging to interpret the results generated by these models.

Despite these challenges, there are significant opportunities for companies that invest in generative AI. One of the main benefits is the ability to create new products and services that were previously impossible. For example, generative AI can be used in fashion to create designs that are personalized to a customer's unique preferences. This creates a competitive advantage for companies that can offer these personalized products.

Another benefit is the potential to reduce costs. Generative AI can be used to automate tasks that were previously done manually, such as creating game levels or designing buildings. This can lead to significant cost savings for companies.

While one foundation model can perform a wide variety of tasks, the applications built on top of it are what enable a specific task to be completed—for example, helping a business's customers with service issues or drafting marketing emails (see graphics below). These applications may be developed by a new market entrant seeking to deliver a novel offering, an existing solution provider working to add innovative capabilities to its current offerings, or a business looking to build a competitive advantage in its industry.

While generative AI will likely affect most business functions over the longer term, current trends suggest that information technology, marketing and sales, customer service, and product development are most ripe for the first wave of applications:

• Information technology. Generative AI can help teams write code and documentation. Already, automated coders on the market have improved developer productivity by more than 50 percent, helping to accelerate software development.
• Marketing and sales. Teams can use generative AI applications to create content for customer outreach. Within two years, 30 percent of all outbound marketing messages are expected to be developed with the assistance of generative AI systems

• Customer service. Natural-sounding, personalized chatbots and virtual assistants can handle customer inquiries, recommend swift resolution, and guide customers to the information they need. Companies such as Salesforce, Dialpad, and Ada have already announced offerings in this area.
  
• Product development. Companies can use generative AI to rapidly prototype product designs. Life sciences companies, for instance, have already started to explore the use of generative AI to help generate sequences of amino acids and DNA nucleotides to shorten the drug design phase from months to weeks
  

While generative AI is still in its early stages, including its capabilities, plans and priorities but has the potential to create significant value in various industries. Companies that invest in generative AI for sure will be well-positioned to take advantage of these opportunities and create new products and services that were previously impossible.