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EY predicts global GenAI investment may exceed $12B by end of 2024 if growth continues.
In brief
- Generative AI (GenAI) investments are rising with $21.3 billion in 2023 and an expected $12 billion in 2024, propelled by major tech firms and expanding into diverse sectors despite economic challenges.
- Ireland is poised to become a GenAI innovation hub, supported by its tech ecosystem and favourable business environment, while Europe's growing AI sector and regulatory developments may enhance its global GenAI standing.
In the swiftly advancing realm of Artificial Intelligence (AI), Generative AI (GenAI) has established itself as the new frontier of technological growth and investment.
In the opening quarter of 2024, the global industry has seen an impressive influx of $3 billion in investments. EY anticipates that, if this upward trajectory is maintained throughout the year, the total global investment could surpass the $12 billion mark by the close of 2024.
This surge comes on the heels of 2023's landmark investment of $21.3 billion—testament to a pivotal chapter in GenAI's financial journey that was significantly higher than the preceding year.
GenAI has captured the imagination and capital of pioneers and thought leaders across the globe, witnessing North America as a stronghold for the majority of investments thus far. It's not just the staggering dollar amounts that draw attention, but also the expansion of appropriation across various sectors: from healthcare to visual media, and from natural language interfaces to a predicted shift towards Vertical AI applications—specific, niche AI solutions.
As the traditional investment landscapes wrestle with economic headwinds brought forth by interest rates and lifestyle shifts post-pandemic, GenAI stands resilient. Its trajectory is propelled by high-profile technology powerhouses such as Amazon and Microsoft. Such companies have propelled the GenAI market to new heights in 2023 with historic investments into leading AI entities like OpenAI, Anthropic, and InflectionAI, combining for an astonishing $15.3 billion infusion.
The GenAI space, while registering monumental investments, remains ripe with potential and pioneering spirit, with over 75% of GenAI startups still in their infancy or yet to raise equity funding. However, a discerning eye is being cast upon business models as the technology matures, prompting a call for a patient, long-term vision amidst the swift turnover of AI technologies and vigorous market competition.
In this landscape of rapid development and investor optimism, Ireland emerges as a beacon of untapped potential. With its robust technology and life science ecosystem, coupled with a conducive business environment and a rich talent pool, the nation is poised to become a hub for GenAI advancements and investments.
There is an imperative need for business diligence as we integrate GenAI into the fundamental operations and strategic frameworks. It's crucial to approach the adoption of such technologies with caution, being mindful of the regulatory and reputational risks that accompany them. Yet, investing in GenAI is far from mere speculation; for early adopters, it has already brought substantial advancements, heralding the onset of a revolutionary era energised by AI innovations.
Grit Young
EY Ireland Valuations Partner
Europe, trailing behind the US in GenAI investments, nevertheless holds promise with burgeoning AI unicorns and pioneers such as Mistral in France and AI pioneers DeepMind in the UK. The advent of the EU AI act could further position the region, particularly Ireland, at the forefront of GenAI leadership.
Summary
As the GenAI sector evolves, it's imperative to turn attention to a future defined by more niche, Vertical AI deployments. The move of key AI players towards European headquarters, including those in Ireland, underscores a global strategy that EY.ai fully embraces through its extensive ecosystem, pairing human intelligence with AI to catalyse business transformation and societal progress.
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