Beware AI’s hidden costs before they bankrupt innovation

Key Takeaways:

– Mark Troller has over 20 years of diverse IT leadership experience
– Artificial intelligence (AI) is the future of business innovation
– AI’s reliance on cloud storage and computing powers is a major factor in its effectiveness
– Cloud infrastructure and applications enable advanced analytics, hyper-automation, and large language models
– AI’s addiction to the cloud can lead to unforeseen and undetected cloud expenditures
– GenAI tools add another layer of technical debt and can make investment strategies financially unsustainable
– The AI cloud could grow at record-breaking speeds, potentially leading to AI-cloud bankruptcies
– Hidden costs can limit the ability to create new budgets and sustain digital transformation.

TechCrunch:

As the lynchpin of digital innovation, artificial intelligence holds the future for every forward-leaning business. But while AI and generative AI pave a path toward opportunity, they come with financial sustainability risks that can threaten the durable use of these technologies.

Unpacking this issue requires understanding AI’s addiction to the cloud. AI relies heavily on cloud storage and computing powers. Separate, they are nothing, but together, AI has velocity.

Cloud infrastructure and applications give advanced analytics, hyper-automation, and large language models the fast, scalable delivery channels they need to be effective. But this also triggers cloud expenditures that can go unforeseen and undetected. The Wall Street Journal recently published an article on how AI is impacting the ability to control cloud costs. Hidden infrastructure and application costs pile expenses on an already tricky cloud dynamic:

GenAI is driving another layer of technical debt for many businesses.

When you factor in AI’s costly yet indispensable ally with the high demands for new GenAI tools, it’s easy to see why investment strategies can quickly become financially unsustainable. GenAI is driving another layer of technical debt for many businesses. Under the pressures of constant innovation, we could see the AI cloud grow at new, record-breaking speeds. As these factors come together in 2024, we may even see cloud hangovers of the past three years grow into full-fledged AI-cloud bankruptcies. Hidden costs have the potential to bankrupt AI innovation because they limit the ability for CIOs and CFOs to create new budgets, finding funding from within as a means to sustain the economic cycles of digital transformation.

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AI Eclipse TLDR:

The article discusses the financial sustainability risks associated with artificial intelligence (AI) and generative AI technologies. It highlights AI’s addiction to cloud storage and computing power, which are essential for its effectiveness. However, this reliance on the cloud also leads to unforeseen and undetected cloud expenditures. The article references a Wall Street Journal article that explores how AI impacts the ability to control cloud costs. Additionally, the introduction of GenAI tools further adds to the financial burden and technical debt for businesses. The article warns that without careful investment strategies, the AI cloud could become financially unsustainable, potentially leading to AI-cloud bankruptcies. These hidden costs limit the ability of chief information officers (CIOs) and chief financial officers (CFOs) to create new budgets and find funding for AI innovation, hindering the economic cycles of digital transformation.