Analysis
Generative artificial intelligence looks set to reshape industries, promising unprecedented growth while challenging us to navigate its profound societal implications. The Potential Economic Impact of Generative AI
by JANE RHODES
G enerative artificial intelli - gence (AI) has undoubtedly been one of the hottest topics of 2023. This type of technology is used to generate new content, such as text, images, and video, as opposed to other categories such as discriminative AI, which focuses on classifying or identifying content that is based on preexisting data. The public’s curiosity was piqued by applications like ChatGPT, a large language model–based chatbot developed by OpenAI and launched on Nov. 30, 2022. It proved to be extremely popular, reaching 1 million users in five days, and 100 million users in just two months. A slew of other generative AI apps are now widely used, and their rise has been hard to ignore. The fast- paced evolution of such technologies underscores the breakneck speed of technological advancement. The backbone of generative AI is built on foundation models, which mimic the vast and interconnected neural pathways of the human brain. These are central to deep learning and
are a marked progression, adept at processing diverse unstructured data while juggling multiple tasks. This has led to paradigm shifts in areas like image and sound processing. With the dawn of this new AI age, various studies published over recent months suggest it has the potential to reshape numerous fields and bring about sweeping changes to the world economy. A report by McKinsey, a global management consultancy, published on June 14, 2023, says generative AI’s impact on productivity could add the equivalent of $2.6 trillion to $4.4 trillion annually in value to the global economy. This is a staggering contribution, comparable to the GDP of major economies like the U.K. Its report also finds that around three-quarters of the value that the technology could deliver would fall across four areas: Customer operations, marketing and sales, software engineering and research and development (R&D). The report notes that sectors like banking, tech and life sciences
(such as pharmacy and biochem - istry) are set to witness substantial benefits proportional to their revenues, as generative AI boosts productivity. The banking sector alone could see a surge of $200 billion to $340 billion annually with comprehensive AI implementation. Meanwhile, retail and consumer goods could capitalize on an annual boost ranging from $400 billion to $660 billion. Goldman Sachs, a bank, echoes this sentiment, predicting a 7% hike in global GDP — roughly $7 trillion — and a 1.5% bump in productivity growth over a decade, as tools using advances in natural language processing work their way into businesses and society. “Despite significant uncertainty around the potential for generative AI, its ability to generate content that is indistinguishable from human-created output and to break down communication barriers between humans and machines reflects a major advancement with potentially large macroeconomic
56 Vision Magazine
October/November 2023
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