What is Generative AI and How Does it Impact Businesses? | BCG – BCG
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The new wave of generative AI systems, such as ChatGPT, have the potential to transform entire industries. To be an industry leader in five years, you need a clear and compelling generative AI strategy today.
We are entering a period of generational change in artificial intelligence. Until now, machines have never been able to exhibit behavior indistinguishable from humans. But new generative AI models are not only capable of carrying on sophisticated conversations with users; they also generate seemingly original content.
To gain a competitive edge, business leaders first need to understand what generative AI is.
Generative AI is a set of algorithms, capable of generating seemingly new, realistic content—such as text, images, or audio—from the training data. The most powerful generative AI algorithms are built on top of foundation models that are trained on a vast quantity of unlabeled data in a self-supervised way to identify underlying patterns for a wide range of tasks.
For example, GPT-3.5, a foundation model trained on large volumes of text, can be adapted for answering questions, text summarization, or sentiment analysis. DALL-E, a multimodal (text-to-image) foundation model, can be adapted to create images, expand images beyond their original size, or create variations of existing paintings.
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Vladimir Lukic
BCG’s Vlad Lukic discusses how we’re entering the exponential phase of GenAI, and what it takes to deploy it right, and deploy at scale.
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These new types of generative AI have the potential to significantly accelerate AI adoption, even in organizations lacking deep AI or data-science expertise. While significant customization still requires expertise, adopting a generative model for a specific task can be accomplished with relatively low quantities of data or examples through APIs or by prompt engineering. The capabilities that generative AI supports can be summarized into three categories:
Today, some generative AI models have been trained on large of amounts of data found on the internet, including copyrighted materials. For this reason, responsible AI practices have become an organizational imperative.
Generative AI systems are democratizing AI capabilities that were previously inaccessible due to the lack of training data and computing power required to make them work in each organization’s context. The wider adoption of AI is a good thing, but it can become problematic when organizations don’t have appropriate governance structures in place.
As users experiment with these systems, there are serious ethical issues that need to be addressed:
To unlock the full potential of AI, companies must embrace both predictive and generative AI, align tech investments strategically, and prepare their talent for new challenges. In this video series, BCG experts share key strategies to forge a competitive edge for the future.
EXPLORE THE SERIES
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Generative AI text models can be used to generate texts based on natural language instructions, including but not limited to:
This is just the beginning. As companies, employees, and customers become more familiar with applications based on AI technology, and as generative AI models become more capable and versatile, we will see a whole new level of applications emerge.
Generative AI has massive implications for business leaders—and many companies have already gone live with generative AI initiatives. In some cases, companies are developing custom generative AI model applications by fine-tuning them with proprietary data.
The benefits businesses can realize utilizing generative AI include:
BCG and Zeiss developed an application to give prospective patients fast, accurate, validated answers about elective treatments.
The company’s leaders recognize that a GenAI transformation requires a transformation of business processes and people development.
BCG is collaborating with OpenAI to help our clients realize the power of OpenAI technologies and solve the most complex challenges using generative AI—responsibly.
BCG and Google Cloud are excited about generative AI’s transformative capabilities, devoting significant resources to jointly help customers apply this breakthrough technology.
The ability to scale AI applications continues to challenge businesses across industries. Our collaboration with Intel brings together BCG’s transformation expertise, BCG X’s engineering capabilities, and Intel’s AI hardware and software in order to rapidly create enterprise-grade generative AI solutions for our clients—securely and responsibly.
Executives should work with their data engineers to identify creative ways to discover new generative AI solutions and assess which solutions are likely to bring the most value to the company. Generative AI is still in its infancy and companies must think outside the box to identify unique or hidden applications that will provide unique competitive advantage.
To get started experimenting to find new use cases, leaders need to ask themselves four questions:
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Generative AI technology will cause a profound disruption to industries and may ultimately aid in solving some of the most complex problems facing the world today. Three industries have the highest potential for growth in the near term: consumer, finance, and health care.
Given that the pace the technology is advancing, business leaders in every industry should consider generative AI ready to be built into production systems within the next year—meaning the time to start internal innovation is right now. Companies that don’t embrace the disruptive power of generative AI will find themselves at an enormous—and potentially insurmountable—cost and innovation disadvantage.
Salesforce’s Jonathan Phillips and BCG’s Bryan Gauch discuss the importance of taking GenAI from concept to reality, as well as the opportunities and challenges in the year ahead.
Generative AI can bring a host of ideas—and a critical “outside the box” perspective—to teams working through the innovation cycle.
BMW’s Global Head of Brand and Product Management explains how the right organizational processes and platforms can help companies maximize the value of GenAI tools.
BCG’s survey of 1,400+ C-suite executives reveals that GenAI is quickly changing the way companies do business—and big gaps are emerging between the winners and the observers.
For many companies, data governance is already a pain point, the work too manual and tedious. Generative AI increases the burden but, smartly applied, can reduce it instead.
The opportunities presented by generative AI are significant, but leaders need to focus equally on the risks. What is a responsible C-suite member supposed to do?
BCG’s generative AI experts have deep experience in AI technology, neural networks, generative models, the benefits of generative AI, and more. Here are some of our experts in generative AI.
Managing Director & Senior Partner; Global Director, BCG Henderson Institute
Paris
Managing Director & Partner
Seattle
Managing Director & Senior Partner
Paris
Managing Director & Partner
Stockholm
Managing Director & Partner
Silicon Valley – Bay Area
Managing Director & Senior Partner
San Francisco – Bay Area
Subscribed
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Pursuant to Transparency in Coverage final rules (85 FR 72158) set forth in the United States by The Departments of the Treasury, Labor, and Health and Human Services click here to access required Machine Readable Files or here to access the Federal No Surprises Bill Act Disclosure.
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
Our aerospace and defense experts help industry players navigate their day-to-day operations and identify ways they can innovate for the future.
Breakthroughs in automotive technologies and emerging business models are changing the world. We help the leading game changers stay ahead of the curve.
Brands around the world must master digital to survive. We have the expertise and capabilities to power consumer-centric innovation grounded in data, analytics, and AI.
We partner with effective organizations and educators to improve student outcomes and learning models—from K-12 through higher education—locally, nationally, and globally.
BCG’s energy consultants work with business leaders, governments, and ecosystems to create energy solutions for a net-zero pathway and beyond – that are practical, equitable, and just.
BCG helps global and regional financial institutions build for the future using digital innovations and an ESG focus to drive fundamental change and deliver on evolving customer demands.
We work with organizations around the globe to transform health care operating models enabling them to deliver medical breakthroughs, innovative cures, and transformative patient experiences.
Our experts provide industrial goods clients with the skills they need to adapt to change and rethink their business models in their rapidly evolving industries.
Customers increasingly expect more from insurers. BCG helps companies rise to the challenge and equips them to lead in the digital future.
The rapid growth of private capital brings unprecedented opportunities to unlock value while making a positive difference in the world. BCG advises leading investors on how to stay ahead.
BCG’s Public Sector practice joins forces with global organizations and governments to transform how they operate so they can better meet increasingly challenging and complex societal problems.
We help the world's leading retailers compete in the digital era by developing and delivering cutting-edge tech strategies and identifying new sources of growth.
BCG collaborates with technology, media, and telecommunications companies to solve problems and pursue new strategies as they continue to shape the future.
We empower clients to boldly reinvent themselves and embrace digital innovation so they can better serve their customers amid today's volatility.
The industry has suffered an unprecedented shock. BCG collaborates with travel and tourism providers as they navigate this turbulence and build resilience for the future.
See how we help our clients expand their capabilities on multiple existing—and emerging—fronts.
Scaling artificial intelligence can create a massive competitive advantage. Learn how our AI-driven initiatives have helped clients extract value.
Excavating purpose is among the rewarding journeys companies can take. BCG BrightHouse helps organizations embrace purpose to achieve higher returns, employee engagement, and customer satisfaction.
Leaders face an uncertain landscape. The impact of each decision feels impossible to predict, which is why they need strategies that are proactive, resilient, and competitive. No matter their starting point, BCG can help.
Even today's leading companies could benefit from an always-on transformation capability—the kind that engenders resilience and leads to long-term value creation. BCG knows what it takes to build this muscle.
The time for global climate action is now. BCG helps clients accelerate their climate and sustainability journey and seize new opportunities to build competitive advantage.
The rules of business and for maintaining competitive advantage are changing. We help companies reimagine strategy and value creation in a fast-paced world.
BCG’s cost advantage approach resets costs within a framework that is customized, precise, and thorough.
Having rich customer insights allows companies to solve pressing business problems and capture growth opportunities. BCG’s Center for Customer Insight arms companies with the tools they need to unlock this advantage.
BCG identifies and delivers high-impact programs to build companies of the future that will outperform the competition in the future.
Our work enables clients to build teams that fully reflect the diversity in the world and the communities they serve—and empowers them to advance their businesses and our society.
Innovation is extremely difficult—but also necessary. We collaborate closely with organizations on holistic innovation journeys to help them secure long-term competitive advantage.
We stand side by side with our clients, offering expertise and strategy as they look to expand the boundaries of their businesses in an uncertain and sometimes tumultuous world.
We ask three guiding questions: when, where, and how will you manufacture in an era of emerging technologies and economic uncertainty? We're committed to helping our clients arrive at answers that are right for them.
Customer centricity is key and made possible through analytics, agile processes, and a test-and-learn culture. BCG partners with marketing and sales organizations to make it happen.
BCG provides the strategic decision-making capabilities and proactive portfolio management companies need to create value from M&A, transactions, and PMI.
We help clients unlock value from every aspect of their operations, maximizing efficiency and effectiveness in procurement, service operations, supply chains, and beyond.
Organization is at the core of nearly everything we do at BCG. We believe that when clients have the right organization design, the possibilities are endless.
Any company's most important asset is its people. Our experts in leadership, culture, talent, reskilling, and HR help businesses respond to current and future challenges.
We bring expertise and data-driven strategies to help clients unleash the power of effective pricing—and unlock its potential to increase the bottom line.
BCG's Risk and Compliance consulting supports their client's growth ambition with strategic, transformational, and technical functional offerings in Finance.
By focusing on tangible ways to generate positive social impact (related to climate change, global education, racial equity, and more) we help organizations tackle some of the most pressing issues facing our world today.
Zero-based budgeting is a powerful strategy that yields significant benefits. Our approach fosters a culture of cost consciousness, growth, and innovation.
BCG X disrupts the present and creates the future by building new products, services, and businesses in partnership with the world’s largest organizations.
Explore a cross-section of the latest insights and perspectives from BCG experts.
At the BCG Henderson Institute (BHI), we believe that leadership starts in the mind and that ideas precede action. We bring the ideas and inspiration that will help forward-looking leaders shape their next game.
Subscribe to our newsletters and e-alerts to stay connected with the latest insights, data, ideas, and perspectives from BCG.
Access BCG’s alumni network for former and current BCGers.
As a top consulting firm, BCG helps clients with total transformation—driving complex change, enabling organizations to grow, and driving bottom-line impact.
Meet BCG’s executive, functional, and regional leadership teams.
Find BCG offices around the world.
Visit our media center for resources, press releases, trending topics, contacts, and more.
When you start with Beyond there’s no limit to how far we can advance the world.
The new wave of generative AI systems, such as ChatGPT, have the potential to transform entire industries. To be an industry leader in five years, you need a clear and compelling generative AI strategy today.
We are entering a period of generational change in artificial intelligence. Until now, machines have never been able to exhibit behavior indistinguishable from humans. But new generative AI models are not only capable of carrying on sophisticated conversations with users; they also generate seemingly original content.
To gain a competitive edge, business leaders first need to understand what generative AI is.
Generative AI is a set of algorithms, capable of generating seemingly new, realistic content—such as text, images, or audio—from the training data. The most powerful generative AI algorithms are built on top of foundation models that are trained on a vast quantity of unlabeled data in a self-supervised way to identify underlying patterns for a wide range of tasks.
For example, GPT-3.5, a foundation model trained on large volumes of text, can be adapted for answering questions, text summarization, or sentiment analysis. DALL-E, a multimodal (text-to-image) foundation model, can be adapted to create images, expand images beyond their original size, or create variations of existing paintings.
Copy Shareable Link
Vladimir Lukic
BCG’s Vlad Lukic discusses how we’re entering the exponential phase of GenAI, and what it takes to deploy it right, and deploy at scale.
Copy Shareable Link
These new types of generative AI have the potential to significantly accelerate AI adoption, even in organizations lacking deep AI or data-science expertise. While significant customization still requires expertise, adopting a generative model for a specific task can be accomplished with relatively low quantities of data or examples through APIs or by prompt engineering. The capabilities that generative AI supports can be summarized into three categories:
Today, some generative AI models have been trained on large of amounts of data found on the internet, including copyrighted materials. For this reason, responsible AI practices have become an organizational imperative.
Generative AI systems are democratizing AI capabilities that were previously inaccessible due to the lack of training data and computing power required to make them work in each organization’s context. The wider adoption of AI is a good thing, but it can become problematic when organizations don’t have appropriate governance structures in place.
As users experiment with these systems, there are serious ethical issues that need to be addressed:
- Unknown Capabilities. Large generative AI systems such as ChatGPT have exhibited a massive capability overhang—skills and dangers that are not planned for in the development phase and are generally unknown and unexpected even to the developers. This can pose a serious threat if the right guardrails are not in place to effectively manage unexpected usage.
- Bias and Toxicity. Outputs from generative AI will be as biased as the data it is trained on. Many popular language models today are trained on the wilds of the internet, where there is plenty of bias—along with toxic language and ideas.
- Data Leakage. Many companies have quickly put policies in place to forbid employees from entering sensitive information into ChatGPT, fearing that it could get incorporated into the AI model and reemerge in public.
- Hallucination. ChatGPT can make arguments that sound extremely convincing but are 100% wrong. Developers refer to this as “hallucination,” a potential outcome that limits the reliability of the answers coming from AI models.
- Lack of Transparency. Generative AI models currently provide no attribution for the facts underlying the content they generate, which makes it impossible to verify the correctness of generated claims—further increasing the danger posed by AI-model hallucinations.
- Copyright Controversies. Since the data sets used by AI models are derived from the public internet, a legal question arises: Does the content those models create amount to duplications of copyrighted works?
To unlock the full potential of AI, companies must embrace both predictive and generative AI, align tech investments strategically, and prepare their talent for new challenges. In this video series, BCG experts share key strategies to forge a competitive edge for the future.
EXPLORE THE SERIES
- GPT-3, or Generative Pretrained Transformer 3, is an autoregressive model pre-trained on a large corpus of text to generate high-quality natural language text. GPT-3 is designed to be flexible and can be fine-tuned for a variety of language tasks, such as language translation, summarization, and question answering.
- LaMDA, or Language Model for Dialogue Applications, is a pre-trained transformer language model to generate high-quality natural language text, similar to GPT. However, LaMDA was trained on dialogue with the goal of picking up nuances of open-ended conversation.
- LLaMA is a smaller natural language processing model compared to GPT-4 and LaMDA, with the goal of being as performant. While also being an autoregressive language model based on transformers, LLaMA is trained on more tokens to improve performance with lower numbers of parameters.
- GPT-4 is the latest release of GPT class of models, a large-scale, multimodal model which can accept image and text inputs and produce text outputs. GPT-4 is a transformer-based model pretrained to predict the next token in a document. The post-training alignment process results in improved performance on measures of factuality and adherence to desired behavior.
- DALL-E is a type of multimodal algorithm that can operate across different data modalities and create novel images or artwork from natural language text input.
- Stable Diffusion is a text-to-image model similar to DALL-E, but uses a process called “diffusion” to gradually reduce noise in the image until it matches the text description.
- Progen is a multimodal model trained on 280 million protein samples to generate proteins based on desired properties specificized using natural language text input.
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Generative AI text models can be used to generate texts based on natural language instructions, including but not limited to:
This is just the beginning. As companies, employees, and customers become more familiar with applications based on AI technology, and as generative AI models become more capable and versatile, we will see a whole new level of applications emerge.
Generative AI has massive implications for business leaders—and many companies have already gone live with generative AI initiatives. In some cases, companies are developing custom generative AI model applications by fine-tuning them with proprietary data.
The benefits businesses can realize utilizing generative AI include:
BCG and Zeiss developed an application to give prospective patients fast, accurate, validated answers about elective treatments.
The company’s leaders recognize that a GenAI transformation requires a transformation of business processes and people development.
BCG is collaborating with OpenAI to help our clients realize the power of OpenAI technologies and solve the most complex challenges using generative AI—responsibly.
BCG and Google Cloud are excited about generative AI’s transformative capabilities, devoting significant resources to jointly help customers apply this breakthrough technology.
The ability to scale AI applications continues to challenge businesses across industries. Our collaboration with Intel brings together BCG’s transformation expertise, BCG X’s engineering capabilities, and Intel’s AI hardware and software in order to rapidly create enterprise-grade generative AI solutions for our clients—securely and responsibly.
Executives should work with their data engineers to identify creative ways to discover new generative AI solutions and assess which solutions are likely to bring the most value to the company. Generative AI is still in its infancy and companies must think outside the box to identify unique or hidden applications that will provide unique competitive advantage.
To get started experimenting to find new use cases, leaders need to ask themselves four questions:
Copy Shareable Link
Generative AI technology will cause a profound disruption to industries and may ultimately aid in solving some of the most complex problems facing the world today. Three industries have the highest potential for growth in the near term: consumer, finance, and health care.
Given that the pace the technology is advancing, business leaders in every industry should consider generative AI ready to be built into production systems within the next year—meaning the time to start internal innovation is right now. Companies that don’t embrace the disruptive power of generative AI will find themselves at an enormous—and potentially insurmountable—cost and innovation disadvantage.
Salesforce’s Jonathan Phillips and BCG’s Bryan Gauch discuss the importance of taking GenAI from concept to reality, as well as the opportunities and challenges in the year ahead.
Generative AI can bring a host of ideas—and a critical “outside the box” perspective—to teams working through the innovation cycle.
BMW’s Global Head of Brand and Product Management explains how the right organizational processes and platforms can help companies maximize the value of GenAI tools.
BCG’s survey of 1,400+ C-suite executives reveals that GenAI is quickly changing the way companies do business—and big gaps are emerging between the winners and the observers.
For many companies, data governance is already a pain point, the work too manual and tedious. Generative AI increases the burden but, smartly applied, can reduce it instead.
The opportunities presented by generative AI are significant, but leaders need to focus equally on the risks. What is a responsible C-suite member supposed to do?
BCG’s generative AI experts have deep experience in AI technology, neural networks, generative models, the benefits of generative AI, and more. Here are some of our experts in generative AI.
Managing Director & Senior Partner; Global Director, BCG Henderson Institute
Paris
Managing Director & Partner
Seattle
Managing Director & Senior Partner
Paris
Managing Director & Partner
Stockholm
Managing Director & Partner
Silicon Valley – Bay Area
Managing Director & Senior Partner
San Francisco – Bay Area
Subscribed
Boston Consulting Group is an Equal Opportunity Employer. All qualified applicants will receive consideration for employment without regard to race, color, age, religion, sex, sexual orientation, gender identity / expression, national origin, protected veteran status, or any other characteristic protected under federal, state or local law, where applicable, and those with criminal histories will be considered in a manner consistent with applicable state and local laws.
Pursuant to Transparency in Coverage final rules (85 FR 72158) set forth in the United States by The Departments of the Treasury, Labor, and Health and Human Services click here to access required Machine Readable Files or here to access the Federal No Surprises Bill Act Disclosure.
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
