GenAI To Generate Economic Value Worth $2.6-$4.4 Trillion Annually: Report

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New Delhi: Generative AI (GenAI) is expected to generate economic value worth $2.6-$4.4 trillion annually, of which around 75 percent is expected to be concentrated in software engineering, customer operations, product and R&D, and sales and marketing, which are core service lines of many technology service providers in India, a new report showed on Thursday.

Emerging GenAI use cases will drive productivity, and growth for tech services players with reimagined service offerings over the next 5 years, according to the report by Nasscom in association with McKinsey & Company. (Also Read: Latest FD Rates 2023: 7 Major Banks Offering Up To 7.5% Interest On Fixed Deposits)

More than 100 generative AI use cases could potentially drive 15 to 20 percent additional growth over five years and generative AI could further improve delivery productivity by 30 percent in the next two to three years, the findings showed.

The last 6-8 months have seen a rapid evolution in generative AI, with multiple releases across models, datasets and applications.“The generative AI space will continue to evolve with the trajectory of technology service providers being reshaped and new capabilities emerging.

Providers are re-evaluating their approaches based on new insights and many are intensifying their investments in areas like technology, talent, risk management, and even mergers and acquisitions with generative AI startups,” explained Sangeeta Gupta, Senior Vice President, and Chief Strategy Officer at Nasscom.

With GenAI, the general and administrative costs (G&A), inclusive of sales, are predicted to see a 40 percent surge in productivity over the next three years, supported by functions like finance and accounting, legal, and HR.

Generative AI brings both tailwinds and headwinds for technology service providers, with the impact determined by the existing service line and vertical mix, as well as an interplay of drivers and the speed of adoption, the report mentioned.

“It holds the promise of a step change in productivity and unlocking multiple new revenue pools for providers. Early movers are positioned to emerge as frontrunners in this dynamic industry, said Ankur Puri, Partner, McKinsey & Company.

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