Dive Brief:

• The business demand for artificial intelligence tools has accelerated in recent months, according to data released by London-based Vertice, which provides a platform designed to help companies with saving money on software purchases.

• AI’s share of overall software spending across the Vertice network grew to 1% by the end of March, up from 0.2% at the start of the year, a five-fold increase, according to the company, which has purchasing data on 16,000 vendors. The spike, which was highlighted in a recent Vertice blog post, comes as public interest in AI is exploding in the wake of the launch of ChatGPT, a generative AI tool created by Microsoft-backed startup OpenAI.

• “The market is still nascent, so the value remains nebulous to many, but it's likely to keep growing as organizations continue to experiment with the technology,” Joel Windels, vice president of Americas and co-founder of Vertice, told CFO Dive. 

Dive Insight:

Global spending on AI, including software, hardware, and services, is expected to reach $154 billion in 2023, an increase of 26.9% over the amount spent in 2022, according to research firm IDC. 

The industry is under the spotlight thanks to growing excitement around ChatGPT, which was launched in November. Such “generative AI” tools are known for their ability to produce text and other forms of output based on what they have learned. 

During an earnings call last week, Microsoft executives credited generative AI technology investments with boosting the company’s cloud business. The software giant reported $28.5 billion in cloud revenue for the three-month period ending March 31, up 22% year over year.

“We will continue to invest in our cloud infrastructure, particularly AI-related spend, as we scale with the growing demand, driven by customer transformation,” Microsoft CFO Amy Hood said during the call.

Generative AI’s potential was also a dominant theme in earnings calls held last week by competing cloud service providers Google and Amazon. 

In January, Microsoft said it was extending its partnership with OpenAI through a “multi-year, multi-billion-dollar” investment. Since then, the software giant has moved to quickly incorporate AI into several of its products and services, including Azure, its cloud computing platform. 

Google, meanwhile, has released a ChatGPT competitor known as Bard.

In a recent survey by accounting firm KPMG, 65% of corporate executives said they believe generative AI will have a major impact on their organization in the next three to five years. But nearly the same number (60%) said they’re still a year or two away from implementing the technology. They cited hurdles such as determining clear business cases and installing the right technology, talent, and governance.

In addition, cybersecurity and data privacy were top concerns for respondents, at 81% and 78% respectively.