New research from Enterprise Strategy Group highlighted the degree to which generative AI has taken the market by storm. Emerging onto the scene with dramatic effect just two years ago with the launch of ChatGPT, it’s evident that organizations who are pursuing generative AI strategies have big expectations. In fact, when asked to rank the importance of generative AI alongside other strategic initiatives, it came in third, behind only digital transformation and cybersecurity resiliency initiatives (see Figure 1).¹

A huge part of generative AI’s appeal comes down to its broad applicability—organizations are looking to apply generative AI to a vast array of workflows and processes. However, Enterprise Strategy Group research suggests interest is coalescing in a few specific areas, namely product and software development, customer service, operations (both IT and non-IT), and research, with organizations expecting to see the technology drive savings through increased productivity and improved operational efficiency, as well as driving a better customer experience.

In the initial phase of adoption, it’s clear that the public cloud providers are viewed as the primary venue for running generative AI use-cases, with just over three quarters of respondents selecting this location. However, 84% of respondents said it’s important to incorporate their own enterprise data to support their generative AI initiatives.² Accordingly, other venues—including on-premises data centers, edge locations, GPU clouds and co-located facilities—will play a role too.

Expectations might be high around generative AI, but this excitement should be tempered by the challenges that many organizations are already encountering when it comes to implementation. The most cited challenge is lack of staff expertise and skills, though data quality, ethical/legal/regulatory considerations and integrating with legacy systems also feature prominently.³

And as the generative AI landscape continues to evolve at pace, enthusiasm for fast-evolving capabilities such as agentic AI is evident and is attracting considerable levels of interest—67% of respondents are already planning to integrate such intelligent agents into their generative AI use cases, with almost half (47%) viewing them as a valuable productivity tool.⁴

Figure 1. Importance of Generative AI Relative to Other Strategic Initiatives

Source: Enterprise Strategy Group, a division of TechTarget, Inc.

^1. Source: Enterprise Strategy Group Research Report, The State of the Generative AI Market: Widespread Transformation Continues, September 2024. All research references in this brief come from this report.

^2. Ibid.

^3. Ibid.

^4. Ibid.