Hidden costs of AI: How companies optimize their investments!

Hidden costs of AI: How companies optimize their investments!

In Germany, an overwhelming majority of companies recognize the transformative power of artificial intelligence (AI). According to a recent study conducted by Bitkom was carried out, 73 percent of companies expect their competitiveness to be strengthened through the use of AI. At the same time, 64 percent expect costs to be reduced. This illustrates the optimistic approach of companies that are relying on the integration of AI to develop new business models. In fact, 68 percent of respondents believe that AI can create new business opportunities.

However, there is increasing skepticism about whether these expectations will actually be met. A report from Trending Topics shows that 97 percent of companies plan to invest more in AI in the next five years. In particular, 77 percent of companies say they will invest in AI in the next twelve months. However, these ambitions also come with hidden costs that are often not immediately apparent.

Hidden costs of AI investments

Zachary Hanif, the head of AI, ML and data at Twilio, highlights that the costs of AI investments can be divided into two main categories: technical and operational costs. Technically, AI is fundamentally different from traditional software. While classic software only needs to be updated occasionally, AI models require continuous care and maintenance. Many companies implementing AI often do not have clear goals or measurable outcomes for their projects, jeopardizing the effectiveness of the investments.

One of the biggest challenges is that the quality of the model data must be checked regularly to avoid loss of control. Hanif emphasizes that companies should learn from the experiences of the last waves of technology to better control hidden costs. Clean data, shared systems and clear governance structures are crucial to the success of an AI strategy. Companies that take these factors into account are able to stabilize the productive use of AI.

The role of regulation and further perspectives

Bitkom's study also examines the impact of AI on the labor market as well as companies' views on regulating and promoting AI. Generative AI, one of the latest developments in this field, has made significant progress in recent years and is capable of generating text, images and even program code. The application of these new technologies brings with it numerous opportunities, but also practical and legal challenges.

Overall, the progressive integration of AI into corporate strategies in Germany offers both great opportunities and challenges. However, to take full advantage of the benefits, companies must act strategically and keep an eye on hidden costs. This is the only way investment in AI can actually lead to strengthening competitiveness and creating new business models.