One of the most prominent themes to emerge from the latest World Economic Forum in Davos was the rising potential and associated challenges for generative AI.
Euronews Business digs deep and considers the opportunities and challenges for Europe from Generative AI.
What is generative AI?
Generative AI refers to learning models which assist in the creation of new content in any required format. It is trained on “vast databases” and is designed to generate high-quality content in response to given prompts. Considering the ever-increasing popularity of generative AI such as Chat GPT, Dall E & Claude, it is estimated to grow at a compound annual growth rate (CAGR) of 32.2% to touch $53.9 billion (€49.58 billion) by 2028.
Concerns regarding generative AI
With the facility of Generative AI being one click away, the reliance of people on this technological wand has been increasing with every passing day.
Botco surveyed 1,000 marketing professionals about their use of Generative AI. Most of them worked in the finance, software and construction industries. According to the survey, 73% of marketing departments are using generative AI to produce content.
The opportunities that GenAI brings with itself are indeed astonishing; it not only enhances customer interaction and experience, but it also accelerates productivity and efficiency. It has the potential to assist business models in terms of product and service development along with risk and supply chain management. Moreover, it is seen to be able to steer the green business revolution, by helping with data gathering, analysis and reporting of environmental trends. It is also seen as providing sustainable solutions and a framework to address the climate change crisis.
Despite the increasing reliance on GenAI, many influential society members and experts are worried about the safety and privacy aspects of such generated content.
For example, some serious challenges through the use of GenAI could include discriminatory content, privacy violations, copyright legalities, an increase in existing bias, lack of transparency and sensitive information disclosure.
Potential and challenges for Europe regarding Generative AI
Considering the increase in Generative AI investment by various European countries, it is estimated that the investment will further increase by around 115% in the next year, reaching €2.57 billion ($2.8 billion). Most of the sectors such as defence, education, technology, automotive, machinery, pharmaceutical & healthcare are expected to experience considerable impact from the GenAI.
Although few European countries have succeeded in generating business from GenAI, France and Germany are taking the lead in Europe in terms of spending and adoption of GenAI.
For Europe, the integration of GenAI in sectors such as agriculture, automotive and technology, could turn out to be of economic gain to better equip European companies against ever-shifting market conditions.
According to a McKinsey report, taking a long-term view, Generative AI has the potential to enable labour productivity growth of between 0.1% and 0.6% annually. Considering the value that GenAI can deliver is about 75% – mainly through marketing, customer experience, research and development and software engineering – Europe can encourage development and growth and thus add more revenue and profit to its economic landscape.
In the banking, healthcare and sales businesses, GenAI has the potential to take over tasks that come under the banner of minimal in terms of risk management as mentioned in the EUAI Act. Tasks such as monitoring, collecting data and reporting can be carried out with the help of AI so that more and more labour-heavy individual activities can be automated. The integration of GenAI at such levels can speed up the productivity and efficiency of European companies.
One report states: “Despite high levels of experimentation and implementation with GenAI, only 6% of European companies generate business value with their GenAI use cases. France, Germany and the UK lead the region, with about 10% of companies reporting value delivered by their GenAI projects.”
The most commonly cited challenge being faced by European companies in terms of GenAI is the risk of inaccuracy. The second biggest challenge is the ethics concern related to data privacy and safety. Adding to the challenges, are the risks of ambiguous regulatory framework, intellectual rights concerns and data exploitation attempts.
Last year after passing a long period of negotiation, the European Parliament, representing its 27 member countries, signed an agreement as EU AI Act. After signing this act, the EU became the first continent that explicitly set rules for the use of AI to ensure its safety and security. This act provides in-depth guidelines focusing on the formation, utilisation and application of Generative AI but is not expected to take effect until 2025 at the earliest.
The objective of this act has been to ensure the use of technology for the benefit of humanity in terms of improved healthcare, efficient manufacturing and use of sustainable energy. By providing a barometer of risk, ranging from prohibited to minimal risk, this categorisation can help to use the technology in a harmonised way by ensuring intellectual property rights, transparency and data protection. The act is one of a kind in that it also covers ethical concerns, including the societal impact of GenAI, aiming to make it more holistic and practical.
Bearing in mind the existing complexities of the European community, it is of paramount significance that Generative AI should promote regional progress and demonstrate democratic values.
The main focus of European countries in terms of GenAI is the ethical and regulatory concern that reflects the region’s objective of the development of regulated and safe AI.