Not a single day goes by without someone, somewhere talking about the pros or cons of artificial intelligence. Earlier this week, Microsoft CEO, Satya Nadella, took to the stage at the company’s annual Inspire conference.
Microsoft has spent billions supporting OpenAI and this investment has led to a raft of AI enhancements across its office productivity software. Citing global economic figures, Nadella discussed how AI could have a 10% positive impact on GDP (gross domestic product). Given that the latest figures from the Office of National Statistics, shows the UK economy grew just 0.1% between January to March 2023, it is no surprise policymakers are buying into the pipedream that AI will revolutionise the economy and government.
For instance, in a speech earlier this week, minister for the Cabinet, Jeremy Quin spoke about a “revolution in digital and AI”. This will require a recruitment drive across the civil service, to bring in digital talent.
There are many who argue that the UK is well-placed to capitalise on the AI revolution.
The Artificial intelligence sector study 2022 published by the Office for Artificial Intelligence and the Department for Science, Innovation and Technology found that there were 3,170 AI companies working in the UK, which generated £10.6bn in AI-related revenue. The sector also employed more than 50,000 people in AI-related roles, generating £3.7bn in gross value added (GVA). Further, it had secured £18.8bn in private investment since 2016.
But, according to data published in a House of Lords briefing paper, there is a massive gap between the largest AI businesses and the smallest. In 2022, the total revenue generated by micro, small and medium sized AI businesses in the UK was about $3bn. The largest enterprises earned over twice as much ($7.6bn). Then there is where all the AI investment is going: 75% of AI businesses are in the South East.
These figures illustrate that there is already an AI divide and the largest companies are extracting the bulk of the revenue in the emerging AI market. Gartner’s John David-Lovelock, believes AI represents an extinction event for software firms. If they don’t add AI functionality to their software, they will go out of business.
It seems the largest tech businesses already have an unfair advantage and have the capital to extend their dominance in the AI market. Smaller firms may be able to add value to existing AI platforms offered by the tech giants, but this is only a short-term measure. Only businesses with access to unique datasets will be able to offer something valuable that the tech giants won’t be able to replicate. Beyond AI ethics and safety, policymakers need to ensure businesses operating in these niches are able to flourish.