The 2024 State of Enterprise AI Report
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Today, on the a daily brief, men lw ventures published its twenty twenty four state enterprise Y A eye report. Before that, in the headlines of opening, I have been hiring key developers of chrome away from google to develop their own browser. The a daily brief is a daily podcast, ted video, about the most important news and discussions in A I.

To join the conversation, follow the disclosing in our shown notes. Welcome back to the ad daily brief headlines edition, all the daily AI news you need in around five minutes. Our first story today, open eye, is apparently considering taking on google directly by launching their own browser.

According to a group from the information OpenAI have been hiring key developers of chrome away from google to develop their own browser. This comes just weeks after the launch of ChatGPT search in her face. And already OpenAI has been pitching the product for integration with other websites and apps.

The information sources claim that can I asked, redfin, event bride and pricing are all involved in discussions. The pitches reportedly that open an eye could help transform customer interactions, allowing website visits to include neural language search assistant trained on the site's contents. By way of example, a clothing store could include an assistant to help with styling question based on the stories particular inventory.

The company is reportedly also in early talks with samsung to integrate AI features onto their headsets, another assault tn google s dominance with its android platform. All of this adds up to what looks like a big business development push with open a eye trying to model a google style ecosystem rather than just supplying A I models. Then again, that all feels very early.

Sources say the product is still facing technical chAllenges around data security, privacy, extension compatibility, basically everything. But IT still has people excited veteran product gro alan muscle glue route once open eye brings out a browser, it's good game for everyone. They will eat everything.

I'm pretty confident to say that they will easily be able to capture a huge amount of consumer market across a wide range of horizontal and vertical. When someone asked what could they do with the browser that current companies can't, alam said, it's not about capabilities itself, but they already have their branding position to extremely well. If you ask any enorme what A I is, they will say back OpenAI.

IT is a long term trope that ambitious tech companies, at some point always set their sites on a browser, are usually to be disappointed. Nick wingfield, for example, rights. You haven't lived as a major tech company until you roll your own web browser, but this competition between OpenAI and google obviously seems more opportune. Of course, it's not just open the eyes technology that's causing google struggle. Google is in the midst of a huge entire trust case that could see them forced to unwind crime.

Additionally, we're getting information that according to the most recent proposal from the doj, antitrust sanctions against google could have an even more profound impact on the AI industry as well as part of the resolution of the case, which is about google search monopoly, the justice department proposed restrictions on investment, which would force google to online their partnership with anthropic. The restrictions would prevent google from acquiring, investing in or collaborating with any company that controlled where consumer search for information, including query based AI products. Bloomberg sources familiar with the D O J thinking said this proposal was specially intended to apply to google's investment and anthropic.

Google committed to investing two billion in the company last october, with five hundred million being paid up front. The deal was structure to keep the tech giant at arms length, receiving only non voting shares and mere consultation rights over major business decisions. In a blog post, google hit back at what they call an extreme proposal.

They wrote that the proposal would quote, chill, our investment in artificial intelligence, perhaps the most important innovation in our time where google plays a leading role. They went on claiming that, quote, the D O, ja approach, would result in unprecedented government overreach that would harm american consumers, developers and small businesses and jeopardized global economic and technological leadership at precisely the moment it's needed. Most interestingly, the revelation comes just one day after A U.

K. Regulator discontinued their investigation into the google anthropic partnership, finding that IT was not a defective merger. The D, O, J proposal is not final yet.

IT would need to be approved by a judge before IT can be enforced. Staying on our big tech theme, apple is apparently stepping up development of their AI power version of siri. According to bloomberg sources, apple is racing to develop a more conversational version of siri to keep up with OpenAI, another rival voice enabled checkbox. By far, this is the most desired thing when IT comes to apple intelligence and whatever that is going to be ultimately.

And while the project overhaul theory has been rumored for months amid these sort of non shot rolled out of apple intelligence features, this reporting takes on a new tone, implying that apple has finally recognized how important IT is to catch up on a as for features, the product, which has been codenamed alem theory, very mysterious guys will will be capable of having more natural and conversational voice interactions. The assistant will also have expanded ability to use up intense to interact with third party apps. Apple has already been using alem migrations with syrian, their latest IOS bea, when appropriate theory, can hand off queries to ChatGPT for a more detailed answer.

This project seems to be an attempt to bring that future in house, driven by apple proprietary models. The decision to commit resources seems to be a relatively recent one, with apple hiring over the last month for a team that will, quote, create ground shaking conversationist st. And technologies.

According to bomberg reporting, the new series will be unveiled next year, with plans to launch in the spring of twenty twenty six. The question is whether they are already too late, investor or sale. O rote, O M G, apple is such a snail.

I, O S, A teen point one, has no real intelligence to speak up, and syria remains just as dumb. Meanwhile, the world is zipped by them. Fast spring twenty twenty six is like a decade from now, and it's certainly sort of feels like that from where i'm sitting as well.

But at the same time, it's probably a good idea never to entirely count out apple. But so far, IT does seem like they really have been a few steps and potentially a few disaster steps behind when IT comes to generate A I that, however, is going to do IT for today's A I daily brief headlines edition. Next up, the main episode, today's episode is brought you by van tab with if you're starting or scaling your company security program.

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That's be super da eyes slash partner. Walk back to the a daily brief. today.

We are doing a fun one, mental ventures, which is a silicon valley firm that is very, very active in the A. I. Space, has published its twenty four state Price I report.

The results come from surveys with six hundred or more key buyers across U. S. enterprises. And there are some really interesting findings, apologies in advance that this will be a little less visually interesting than our Normal show.

But what we're going to do is go through their major conclusions and considerations, and i'll provide my commentary based on what we're seeing in the market as well. One of the first conclusions is that enterprise A I is moving from pilot to production. The big start here is that A I spending was up more than six hundred percent from the two point three billion that was spent in twenty twenty three, all the way to thirty point eight billion this year.

Mental calls that I quote, clear signal that enterprises are shifting from experimenting to execution. They also note that this comes with a significant organization optimism. Seventy two percent of decision makers, they say, anticipate broader adoption of generate A I tools in the near future.

And yet IT is still very clearly early. More than a third of mental s respondents said that they didn't have a clear vision for how generate A I will be implemented across their organization. So a couple follows for me.

First, this is definitely the case that one, there is increased spending and increased activity around ai. And that too, there is increased optimism in a sense of broadaxe tion coming. My only quibble here is with the framing of from pilots to production generate A I is very much not a technology shift that's going to fit comfortable ly into phases like that.

What I mean is that what we're seeing across the enterprise is that even when pilots are successful and they move into broader institutional adoption, there is a whole additional set of pilots that are just getting started in our earlier in their journey. And what this reflects is that gender of AI Marks a shift in how frequently organizations are going to need to change. It's not a one time transition from P A I.

To post A I is a new and ongoing process. Many organizations, even that have put significant A I initiatives into production, still feel behind in other areas. And that, of course, because generate A I is so wide reaching in its implications still to the, except that the conclusion here is that twenty twenty four was a year of more absolutely, absolutely true.

The next that, though, tells a really important part of the story as well. Mental found that sixty percent of enterprise generated AI investments come from innovation budgets. That obviously reflects the fact that we're still early.

However, that means that forty percent of spending is source for more permanent budgets. And of that, they found fifty eight percent was redirected from existing allocation. The conclusion they come to is that, that demonstrates a growing commitment to AI transformation, and I think that's correct.

As an aside, one of the additional things that we've seen is that the sector of the organza that was dedicated to innovation, while sometimes previously kind of tooth listen under resource. Has become a much more significant player in the general AI era. We're finding that the most successful organizations have reconstituted and reimagine their innovation organizations, not as a silo separate from the rest of the company, but instead as a coordination function that touches every other part of the company that understands the A I.

Implications and issues for legal compliance business units. Basically, everyone you can imagine the innovation part of the organization is getting upscaled alongside the proportional value of artificial intelligence. The next thing meow focuses on is what organizations are actually buying in.

The biggest finding here is that organizations are no longer just spending on foundation models, but are actually making purchases at the application layer, wherein twenty twenty three men low found enterprises spending six hundred million on AI applications. This year, that number was four point six billion and eight x increase. Men also writes, companies aren't spending more than thinking bigger.

On average, jorgen ization have identified ten potential use cases for a eye signally broader vitious calls. Nearly a quarter of those are prioritize for new term implementation. And this, of course, gets the idea of growing sophistication.

The increasing spend on applications reflects the fact that a lot of enterprises are now a couple layers, deepen their AI journey. They have done some pilots, found some things that work, and are doubling down on new transformative workflow that improve and innovate what they do. But what are they doing with A I? Well, that's the next thing that mental explores.

They found in order that the most adopted use cases in the enterprise, or code co pilots with fifty one percent adoption support chat pots with thirty one percent adoption enterprise to retrieve and data extraction, add at between twenty seven and twenty eight percent adoption, and meeting some moriz ation in fifth at twenty four percent adoption. Interestingly, copywriting came in six to twenty one percent and image generation 7 to twenty percent。 The reason is interesting is that obviously writing in are sort of the most dominant consumer use cases.

So you're also seeing here, I think, more sophistication on what constitutes and enterprise versus a consumer use case. This also looks to me like a story of starting by starting a lot of the use cases that are most embraced already are the one to one replacement for old processes with something new and Better. Next up, one of the big questions that many people are asking is to what extent enterprises are going to build their own custom solutions versus just buy from external vendors.

Menlo saw a major shift between twenty twenty three and twenty twenty four on that front. In twenty twenty three, they found eighty percent of enterprises relying on third party jeni software, while in twenty twenty four, twenty seven percent of solutions were developed in house was opposed to fifty three percent source from vendors. Those numbers are dramatic, but we're certainly seeing something similar, at least in the sense that a couple of things are happening.

First of all, a lot of the higher order use cases for generate A I rely on interaction with the company's data. And so there's already an inherent bias and push towards in house solution that has fewer security concerns. At the same time, as companies move towards more specialized use cases, vertical and functional A I applications are just starting to come online.

And so I wouldn't be surprised before in a period for some time where before vertical and functional AI applications reach dominance, a lot of organizations experiment with spinning up their own in house versions of them first. In other words, I wouldn't be surprised if over a four or five year time period, we see first the shift that we're in right now from third party vendors to in house solutions and then back a couple years later towards more third party solutions as they get Better and more specific. Another really interesting finding is that AI isn't just hitting one area.

IT is really hitting every different area. IT commands twenty two percent of the spend, product and engineering commands in nineteen percent, customer support, nine percent, sales, eight percent, data de eight percent, marketing, seven percent, human resources accounting and finance, seven percent, design, six percent, legal, three percent, and everything else, still another six percent. This is really, truly a org wide transformation, which of course, is part of what makes IT such a chAllenge for company is that haven't had to think that broadly incomprehension ly about a transformation process maybe ever.

There is a lot more in this survey, but will close on just one question that obviously takes a huge amount time and attention. What is really the state of agents? It's clear from the survey that agency chief tires are still mostly in the realm of the future.

However, mano did note that from zero percent and twenty twenty three and gentle architecture now make up twelve percent of implementations. I would expect that this number will go up wildly in the next year, but we will, of course, have to wait for next year survey to know for sure. For now though, that is going to do a pretty daily brief until next time peace.