Why firms are stepping up investments in AI

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Kenya’s companies have stepped up investment in generative artificial intelligence. PHOTO | SHUTTERSTOCK

In a business environment where growth is increasingly being driven by innovation and data, Kenya’s companies have stepped up investment in generative artificial intelligence.

Chief executives have prioritised investments in generative AI which they see as a key tool in enhancing operational efficiency and detecting fraud, but are wary of potential cybersecurity risks that come with such technologies.

As a result, business leaders have lined up hundreds of millions of shillings to inject into generative AI— technologies which create text, photos, videos, code and 3D renderings, from the vast data they are trained on.

“What we suspect in the next 12 to 24 months, there’s going to be sort of an uptick in adoption of AI not seen in the region,” Peter Ngahu, regional partner for business consultancy firm PricewaterhouseCoopers (PwC), said in an interview.

“We believe as PwC that AI is going to be the most significant technological change after the invention of the mobile phone in terms of its transformative impact. That view is shared with a lot of CEOs from our conversations with them.”

Risks and opportunities

PwC is one of the firms which conduct annual surveys on CEOs on opportunities and risks facing their businesses.

Findings of the PwC Kenya 2024 CEO Survey, the most recent findings based on feedback from C-suite managers, suggested that the adoption of generative AI has been a gradual process for Kenyan firms.

The pace of rollout of the AI technologies is, however, set to pick with most business leaders admitting it can “significantly change the way their company creates, delivers and captures value”, according to consultants at PwC.

“CEOs are increasingly recognising the potential of AI in terms of enabling them to create the value they are looking for in their clients and power to disrupt their businesses,” Mr Ngahu said. “The sooner they adopt and prepare for the future, the better.”

Organisations view AI as a tool to streamline operations, improve decision-making processes and mitigate risks with the ultimate goal of offering more personalised and efficient services to clients.

The adoption of AI technologies, however, comes with increased risk of regulatory risk.

“When you look at the area of artificial intelligence, for example, there are very particular risks that are coming up there. There’s data protection where there are issues of ethical consideration on how do you share the data, how do you use the data and what happens when there is a data breach,” Mary Wamae, the Group executive director for Equity Bank in charge of subsidiaries, said last November. “We have seen both local and global companies being given very heavy fines for data breaches.”

Regulation and oversight of technological advancement, she added, was “necessary to some extent” as it ensures level playing field for operators and consumer protection through transparency in pricing.

Top talent retention

Ms Wamae spoke during the launch of the 2023 KPMG CEO Outlook report in which the majority of business leaders said they were prioritizing investment in generative AI over attraction and retention of top talent.

AI is increasingly becoming a game-changer for companies, revolutionising the way companies work and deliver benefits to shareholders and customers.

The automation that comes with adoption of the disruptive technology has raised concerns that some jobs will be taken away by machines.

Some of the jobs being replaced by AI technologies include data entry clerks, cashiers, customer service and travel agents.

Analysts say while smart technologies like AI is something companies cannot run away from, it is not likely to replace humans in workplaces.

“What AI has done and will continue to do is to demand different types of skill and training of the people we bring in. This is because technology has transformed the way we work and live,” Mr Ngahu said.

“AI is not limiting the number of opportunities, it is enabling us to do more for our clients hopefully at a lower cost so that we can be more efficient. With AI, we have opportunities for young people but we are asking for different skill sets.”

While AI technologies accomplish tasks in significantly shorter periods than humans, experts say that it plays more of a complementary role to the tasks being done by humans.

For example, AI may perform output tasks, but may not interpret the resultant data.

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