A blog post by VIER CEO Rainer Holler
The wave of Artificial Intelligence (AI) is hitting German companies in 2024 – from SMEs to large enterprises. However, many companies have so far experimented and introduced various AI solutions in their departments in an uncoordinated manner. But now, companies in Germany are at a turning point when it comes to AI. The testing phase is coming to an end. Instead, companies need to professionalize AI deployment and make – sometimes difficult – decisions. Six important trends in the field of AI can be identified:
1. Significant increase in AI investments in the USA and Europe
Investments in AI software, AI services, and corresponding hardware are expected to increase. The US market particularly stands out: According to Statista, the AI market volume in the USA is expected to reach $87 billion in 2024. The market research institute expects an annual growth rate of over 15 percent for the USA, leading to a market volume of $237 billion by 2030. This makes the USA the largest AI market worldwide. For Germany, market research firm IDC forecasts a growth of 30 percent to €8.2 billion.
The largest share is expected to be in AI software, followed by AI services, with hardware playing a minor role. For comparison, around €6.3 billion was spent on artificial intelligence in 2023, and it was just €4.8 billion in 2022. Forrester predicts that genAI software will even have an average annual growth rate (CAGR) of 36 percent from 2023 to 2030. This sector is clearly a focus for companies. The significant funding rounds for AI technology companies such as Aleph Alpha from Germany and Mistral AI from France demonstrate the importance of data sovereignty and the development of European alternatives for investors.
2. AI strategies instead of AI proliferation
Different departments are already using individual AI applications today. However, what often lacks is the strategic framework, transparency, and clear rules. This unfortunately leads to AI proliferation in many companies. To counteract this proliferation of AI tools, cloud-based AI platforms and AI gateways are increasingly coming into focus, which control and make the use of AI manageable. In order for the increasing use of resources – financial means, expertise, and time – to pay off, companies and institutions of all sizes must now catch up with their AI strategies. It is important to define company-wide priorities for AI deployment, objectives, and possible use cases. Compliance is likely to be particularly crucial in this regard. The time for "joyful experimentation" with different AI solutions is definitely over.
3. Customized AI solutions make the difference
If more and more companies are using AI, how does a company stand out from the competition? The leap in technology through AI solutions is immense – whether in marketing, customer service, or production. However, AI provides the same advantages to all companies. Therefore, standard solutions are not necessarily helpful when it comes to positioning against competitors. What matters is how agile a company adapts, deploys, and integrates its product-specific knowledge with AI for its markets. In 2024, specific AI models and smaller Large Language Models (LLMs) will gain importance because they offer higher relevance and accuracy for B2B applications.
4. Human and/or machine – tough decisions ahead
AI solutions are revolutionizing the German workforce. They help combat the shortage of skilled workers and relieve employees of tedious and time-consuming routine tasks. Initially, AI deployment appears simple and cost-effective for companies. Nevertheless, companies are faced with the question of how AI applications will actually yield the greatest returns, whether, and if so, which jobs will change, shift or even disappear completely due to AI. This makes AI deployment a strategic issue for HR as well. HR experts should therefore be involved in the AI strategy early on.
5. AI as a booster for coaching and training
Continuous employee development is crucial for companies to remain competitive. AI is already assisting in personnel development, from specialists to executives. With training based on technologies like Emotional Analytics, which identifies patterns in language, companies are already improving their key performance indicators (KPIs) in communication-intensive areas such as marketing, sales, and service. However, in the future, negotiation situations with difficult business partners or customers could also be trained using AI in a topic-specific manner – and in real-time, for example, via the browser or phone.
The potential applications for AI in human qualification are nearly limitless: For instance, in customer service, AI-based solutions can assist and instruct employees in complex tasks and difficult customer inquiries, complaints, or cancellations. Even executives can prepare for negotiations or crisis communication with the help of AI.
6. AI and compliance
The use of AI in Europe will be governed by the EU AI Act in the future. It aims to ensure that AI systems and the data and information used are secure and uphold the existing fundamental rights and values of the Union, such as non-discrimination. Negotiations on this matter within the EU have concluded. Therefore, companies in Germany also need to prepare for AI compliance becoming mandatory, similar to the General Data Protection Regulation (GDPR). The necessary regulation of AI does not contradict AI innovations from Germany. On the contrary, it will promote and protect them. And the conditions for this are very favorable: Cloud-based AI solutions from Germany, which meet European standards of data security and data protection and are based on our ethical values, provide a tangible competitive advantage.
On the path to professional AI deployment, VIER always works on equal terms with its customers. In innovation workshops, we jointly determine the appropriate application and implementation of specific and individual AI solutions. With the combination of our capabilities and the trusted infrastructure without public cloud components, we are the European alternative to global providers.
