AI Industry Innovations , AI Technologies , Generative AI

Beyond Proof of Concepts: Will Gen AI Live Up to the Hype?

In an article published in July 2024, Gartner forecasted that by the end of 2025, at least 30% of generative AI projects will be abandoned after the proof-of-concept phase. The research firm attributes this to three main factors: poor data quality, insufficient risk controls and escalating costs, often with uncertain business value. While gen AI holds enormous promise for increasing revenue, boosting productivity and reducing costs, organizations must perform a thorough assessment before committing to large-scale investments.

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Two years after ChatGPT's launch, the experimental stage is largely behind CIOs and tech leaders. What once required discretionary funding approval from CFOs and CEOs has now evolved into a clear recognition that gen AI could be a game changer. But scaling this technology across multiple business use cases while aligning them with strategic objectives - without overwhelming users - is a more practical approach. Still, nearly 90% of gen AI projects remain stuck in the pilot phase, with many being rudimentary.

According to Gartner, one major hurdle is justifying the significant investments in gen AI, particularly when the benefits are framed merely as productivity enhancements, which may not always translate into tangible financial gains. "Many organizations leverage gen AI to transform their business models and create new opportunities, yet they continue to struggle with realizing value," said Rita Salaam, distinguished vice president analyst at Gartner. "The financial burden of developing and deploying gen AI models is becoming more pronounced, with costs ranging between $5 and $20 million."

Although it is uncertain whether these projects can prove their worth and generate ROI within the expected time frames, many CEOs remain optimistic. According to a recent survey by the IBM Institute for Business Value, 72% of top-performing CEOs stated that their competitive advantage will depend on the sophistication of their gen AI implementations. In another IBM survey, tech leaders revealed that half of their IT budgets will be allocated to AI and cloud over the next two years. This shift suggests that gen AI is transitioning from the "doubt" phase to the "confidence" phase.

CIOs now need to identify the technology's limitations and risks and pinpoint areas where it can deliver real, measurable value - whether direct or indirect.

Intelligent Use Cases Implemented at Scale

The IBM survey indicates that only 16% of tech executives feel highly confident that their current cloud and data infrastructures are ready to support gen AI. Furthermore, 43% reported increased concerns about their technology infrastructure in the past six months due to the rising demands of gen AI. "The challenges are significant, and the benefits are highly specific to each company, use case and workforce. Often, the impact may not be immediately apparent and might take time to materialize," Salaam said.

Here are a few compelling examples of how gen AI is already delivering tangible results across industries, which may inspire CIOs to reassess their own AI strategies and course-correct where necessary.

Alaska Airlines Cuts Emissions With AI

Alaska Airlines' tech team analyzes vast amounts of data to ensure every flight is safe and efficient. By partnering with Air Space Intelligence (ASI), the airline uses ASI's Flyways AI platform to optimize flight paths and reduce emissions. Using advanced algorithms and machine learning, Flyways AI analyzes factors such as weather patterns, turbulence, air traffic and airspace constraints to recommend the safest and most efficient routes. On average, Flyways AI optimizes 55% of Alaska Airlines' flights, reducing fuel consumption by 3%-5% for flights longer than four hours. In 2023, this integration helped the airline save over 1.2 million gallons of fuel, cutting CO2 emissions by 11,958 metric tons. These savings are crucial to Alaska Airlines' goal of becoming the most fuel-efficient U.S. airline by 2025 and achieving net-zero carbon emissions by 2040.

Warner Bros. Speeds Up Captioning With AI

Captioning is typically labor-intensive and requires high accuracy. Warner Bros. Discovery developed a captioning solution - caption AI - using Google's Vertex AI to streamline workflows and reduce costs. The AI-driven workflow reduces caption file creation time by up to 80% and lowers associated costs by 50%, enabling faster and more cost-effective captioning without sacrificing quality.

Healthify Uses Gen AI for Sustainable Weight Loss

Healthify, India's largest health platform with 40 million users, has integrated gen AI into its coaching and tracking components to help users achieve sustainable weight loss. Since introducing AI, Healthify users have collectively lost more than 25 million pounds. By integrating OpenAI's API into its AI-powered virtual nutritionist, Ria, Healthify can now manage 300 clients simultaneously. The latest iteration of Ria, which incorporates GPT-3.5 and GPT-4 Turbo, significantly enhances the platform's ability to process data and provide personalized coaching, helping users lose an additional 70% of their target weight.

Booking.com's AI Tool for Travel Recommendations

According to a Booking.com's research, 56% of travelers seek offbeat, lesser-known destinations, especially during peak season. In response, the company launched AI Trip Planner, a conversational AI tool that personalizes search results based on travelers' unique preferences. For example, a query such as "show me seaside homes in Italian towns less frequented by tourists" yields highly specific and tailored recommendations, improving the overall customer experience.

Uber AI Assistant to Help EV Drivers by 2025

In 2020, Uber set an ambitious goal to become an emission-free platform by 2040. Currently, it has over 182,000 EVs in its global fleet. By early 2025, Uber plans to launch an AI-powered assistant within its driver app to address common questions faced by EV drivers, such as where to charge their vehicles or which EV model to buy. Powered by OpenAI's GPT-4, the assistant will offer personalized advice based on drivers' needs, location and available government incentives.

While the technology offers immense potential, its true value lies in strategic deployment, intelligent use cases and a deep understanding of its limitations.