Businesses are investing increasing amounts of cash in artificial intelligence (AI) technology, with spending expected to grow by 61% year-on-year in 2024, new research from Lenovo highlighted.

40% see AI as a ‘game changer’, according to a new IDC eBook sponsored by Lenovo, titled CIO PlayBook 2024: It’s all About Smarter AI’.

While generative AI may have sparked the current AI boom, all forms of AI are reaping the benefits. An equal proportion of investment is being directed to generative AI (with 25% of investment) as interpretative AI (25%) and machine learning (25%).

Almost all European companies are incorporating generative AI into their strategies, processes, and offerings. Almost two-thirds (57%) of businesses have already invested, and a further 40% are planning to invest in the coming year, while just 3% have no plans to adopt the technology.

Organisations in EMEA plan to implement AI strategies favouring hybrid cloud (48%) or private cloud (24%), with just 17% opting for public cloud, reflecting stringent regulations around data privacy, particularly in mainland Europe.

Giovanni Di Filippo, EMEA president of Lenovo Infrastructure Solutions Group, said, “We are at a point where AI is becoming a reality for organisations in every territory and every sector. CIOs are eagerly embracing the potential of not only generative AI, but also interpretative AI, and will have to make the right tech investments and partnerships to maximise AI value for their organisations.”

Neil Ward-Dutton, VP AI, automation & analytics Europe at IDC commented, “There is a growing consciousness across every sector that AI offers potential to boost efficiency and competitiveness. CIOs should take this opportunity to invest in core enabling technologies, and ensure that AI expertise is not located within one single team, but spread throughout the organisation.”

Investing in AI

Intrigue for AI varies across industries, although most agree on its potential. Manufacturing companies are most excited, with 47% hailing AI as a ‘game changer’.

Telecommunications companies are least excited of those surveyed (22%), with leaders in the sector already having invested significantly in AI in recent years.

A majority of companies in every industry have already invested in generative AI, with half (50%) of government organisations having done so, climbing to 65% in the telco sector and 67% in banking, financial services and insurance (BFSI).

Across sectors, there is also a wide recognition of the importance of edge computing in AI, with organisations in every vertical having increased investment, up 29% in manufacturing and 60% in the telco sector.

AI in different territories

Enthusiasm for AI varies across the EMEA region, the research found, with respondents in France (58%) and the Netherlands (56%) most likely to label AI as a ‘game changing’ technology, while respondents in the Middle East were least likely to do so (30%).

In the UK only 31% stated AI would be a game changer. Over 90% of respondents had either invested in generative AI or planned to do so within the coming year, with Italian companies most likely to have already invested (68%) and Danish companies most likely to be planning to do so (64%). In the UK 96% have either invested or are planning to invest in GenAI.

In EMEA there is a 61% rise in planned AI spending for 2024 compared to 2023, a trend similar to organisations in North America (62%), but much higher than in Asia (45%).

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AI Adoption Challenges

The biggest technology challenge of generative AI, cited by 40% of respondents, was the capability limitations of models (in terms of training data models, which can require large amounts of computational power and data resources), followed by fears around the potential misuse of AI and AI ‘hallucinations’ (37%).

This involves systems that come out with incorrect information. Other technological challenges cited by CIOs included finding a reliable data platform (36%) and reliance on third parties (35%) for generative AI development.

At an organisational level, the most widely cited issue with generative AI was a cultural one, dealing with employee fears around job displacement (40%), followed closely by IT challenges (45%) including resistance from IT teams who are not used to implementing rapidly evolving AI tools and technologies.