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The AI elephant in the room: CIOs are not as keen on production deployments as they seem

"One multinational bank we spoke to received nearly 1,000 ideas from employees about how to leverage AI in their business over a year ago; zero are in production today..."

Talk to any business and they will tell you that they are excited about the productivity leap and returns AI adoption could bring.

But delve deeper and you will find more hesitancy from enterprises than you might expect at this stage. From ChatGPT bans to apps floundering in pre-production, there is still a long way to go before this technology becomes mainstream in production, writes Juliet Bailin, Partner, General Catalyst.

Accelerated adoption vs enduring adoption 

The prevailing narrative around AI has been one of hyper growth and accelerated adoption, surpassing anything that has come before.

Apple recently admitted as much when it announced it would be partnering with OpenAI to bring its Siri technology up to par. Yet actions speak louder than words and companies still seem to be a long way from putting their excitement into production. Hesitation in AI adoption amongst businesses is widespread: one survey in April found that a third of businesses are shelving Gen AI plans following concerns about consumer trust, while more than one in four companies have banned the technology in their workplaces over data concerns, according to Cisco.

See also: AI is helping hyperscalers “burn” customer money: In the real world, CIOs, spies fret

Another survey suggests that only 42% of enterprise-scale companies have actively deployed AI in their business and 40% say they are stuck in the experimentation phase due to the difficulty of implementation, as well as worries around data privacy (57%) and trust and transparency (43%). 

Both CTOs and business leaders have told us how they are testing GenAI, but also uncomfortable about trusting their most valuable data to LLMs. One multinational bank we spoke to received nearly 1,000 ideas from employees about how to leverage AI in their business over a year ago; zero are in production today.

While management teams are demanding AI adoption, many do not understand the value that the technology could bring, nor if that value is worth the cost to deploy it. AI founders need to develop much greater trust with the companies that they want to partner with, if they are to create a long-lasting solution.

Six ways AI startups can win over Enterprise buyers:

  1. Ask for their top priorities, not their AI goals: Most enterprises do not have overarching strategies around AI; solve problems directly tied to key business metrics. 
  2. Build trust: Prioritize security, transparency, and address concerns proactively.
  3. Start internally: Implement AI in non-customer facing products first to build confidence.
  4. Prove ROI: Demonstrate the value of AI early and often through measurable results.
  5. Prioritize scalability: Develop adaptable solutions that integrate easily and grow with the enterprise.
  6. Educate and empower: Organise workshops to demystify AI and foster adoption.

AI will bring huge benefits to enterprises, but founders and teams have to bridge the gap between the hype surrounding AI and its current capabilities for companies to feel confident in the investment. 

Right now, everyone’s talking about AI, but few are actually using it. If we want to overcome Enterprise hesitation, startups need to build trust and create practical solutions to win over these vital buyers. Only then will transformational AI technology evolve into enduring companies.