#096 Cloud Service Providers Are Smiling All The Way To The Bank Due to Generative AI
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AI BYTE # 📢: Cloud Service Providers Are Smiling All The Way To The Bank Due to Generative AI
⭐Generative AI relies on powerful and scalable computing capabilities to process massive amounts of data in real time, and cloud offers the perfect solution and platform for it.
It is no coincidence that the key players in the Generative AI race are cloud hyperscalers, such as Amazon, Google and Microsoft, who have been investing heavily in developing and offering generative AI services and tools to their customers.
Amazon.com reported that its new generative AI capabilities have resonated with customers and have started to be reflected in its financial results. It reported that Amazon Web Services segment sales increased 13% year-over-year.
Google parent Alphabet reported that 26% growth in its cloud unit, with AI being a contributor to that.
Microsoft said its Azure cloud business grew 30% for the quarter ended December 2023, crediting 6 percentage points to AI demand.
According to a recent report by Gartner, more than 80% of enterprises will have used generative AI APIs or models, and/or deployed generative AI-enabled applications in production environments, by 2026, up from less than 5% in 2023.
The report also identified key technologies that are increasingly embedded into many enterprise applications, such as Generative AI-enabled applications, foundation models and AI trust, risk and security management.
The benefits of generative AI for enterprises are manifold, ranging from faster product development, enhanced customer experience and improved employee productivity, to new sources of revenue, competitive advantage and business transformation.
However, currently most of the work is happening in Test Environments and Proof of Concepts. This is driving majority of the workload on cloud platforms. Enterprises are yet to move to full scale deployment of their AI models on the cloud.
Some of the use cases of Generative AI that various industries are playing with:
Consumer: Online furniture retailer Wayfair launched a tool that uses the image-generation AI model Stable Diffusion to help customers reimagine their living spaces.
Energy, Resources & Industrials: Agricultural machinery and construction equipment provider CNH Industrial is tapping OpenAI’s GPT model and Azure infrastructure to test a use case that serves as a search engine for equipment repair.
Financial Services: American Express is using Generative AI to create personalized offers and rewards for its customers, based on their spending patterns and preferences.
Government & Public Services: The UK government is using Generative AI to generate synthetic data for training and testing purposes, while preserving the privacy and security of the original data.
Life Sciences & Health Care: Pfizer is using Generative AI to accelerate drug discovery and development, by generating novel molecules and predicting their properties and interactions.
Technology, Media & Telecommunications: Netflix is using Generative AI to create personalized trailers and recommendations for its subscribers, based on their viewing history and preferences.
Generative AI is a game-changing technology that can drive future cloud growth and innovation, and enable enterprises to achieve new levels of performance, efficiency and differentiation at much lower costs and better efficiency.
Cloud hyperscalers are going to benefit the most from a full-scale adoption by Enterprises.