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From Peak Hype Cycle to Mature in One Year? Predicting GenAI's Lightning-fast Evolution in 2024

By Cynthia Gumbert, CMO, SmartBear

As we head into 2024, the promise and famously explosive growth of generative AI (GenAI) in 2023 have set the stage for unprecedented adoption and incorporation into how people work, for those already embracing the new capabilities. The whirlwind of hype has led to countless new GenAI startup companies, fueling a new rapid wave of venture funding and overall investment in the technology. I believe there will be a rapid evolution to a very different 2024, with a quick path from hype to a sustainable industry.

This compressed hype cycle means 2024 will see interesting and unexpected dynamics in this emerging industry, and I am personally experiencing it as I write this. The driver of this rapid changeover? I believe it's business and engineering leaders at larger companies, more so than investors or startups.

Executives see so many of their employees (and sometimes themselves) rapidly enjoying efficiency gains from adopting GenAI, yet are playing catchup. There is yet to be a widely adopted established and recommended ideal toolset along with the required oversight, safety, security, and scalability.

The path to establishing and trusting your enterprise GenAI "tech stack" will happen in 2024, promising to deliver tangible, sustainable value. However, there will be bumps along the road which I attempt to predict below.

What's beyond the peak of hype? 6 predictions for 2024:

1.  Integration to Existing Workflows

GenAI and Large Language Model (LLM) technologies are becoming woven into the fabric of every tool, amplifying productivity without requiring people to switch context and adopt something new.

2024 heralds the start of a shift away from the era of free and open source tools fully dominating the landscape. Enterprises are increasingly aware that they need secure, private, and IT-managed versions of trusted tools that incorporate powerful AI capabilities. Vendors are seizing the opportunity to monetize the value of their AI-enabled products in exchange for the privacy and security that executives require. And the prices are, in many cases, in line with enterprise-scale SaaS applications, meaning not an insignificant slice of IT's budget.

3.  Time to Measure Productivity!

With executives realizing they need to start budgeting and paying a premium for GenAI capabilities, there will be a focus on measuring tangible productivity gains. In the department that I oversee, Marketing, there's a promise that GenAI can write in seconds what it took a writer to create in hours or days. While it's true that "something" can be written in seconds, a lot of human review is needed through iterations of prompts and re-work. The true time savings is about 50%, not 98% (that goes for this blog as well, I started with some prompts and got a helpful starting point, but I am writing 90% of this from scratch!). The same goes for Microsoft Copilot and other developer/code-assist tools.

With AI becoming quickly expensive, being able to point to proven and measured productivity gains will drive executives' willingness to pay for advanced GenAI capabilities over the free tooling that most workers are currently using. Vendors charging more for advanced capabilities will also need multiple customer proof points and case studies to justify the increased prices.

By the end of 2024, the explosion of free tools across the enterprise, and even single-user paid tools, will likely slow dramatically. Driven by executives adopting a preferred GenAI tool stack and gaining some predictability over pricing, companies will consolidate to just a few vendors or leverage tooling that already incorporates proven AI capabilities.

6.  Startups: Merge, Sell, or Beware

And, here is my most controversial prediction. For all the reasons above, the jubilant proliferation of startups in the GenAI space is likely on shaky ground, more so than any other hyped industry in recent history. A startup that gets an early offer (earlier than hoped for!) to be acquired or integrated into a larger, more established product - take it! As an executive buyer and on the decision-making team for our enterprise toolsets, I know we'll be looking for the more established providers even if "established" means 10-month-old technology, and our customers are also looking for us to embed AI into our toolsets which are already trusted at scale.

In 2024, GenAI will undergo a rapid shift from hype to maturity, led by business and engineering leaders. Look for increasingly integrating GenAI into our workflows, a move to monetization in exchange for privacy and security, and a focus on proving productivity gains. Costlier AI prompts the need for value justification, leading to tool consolidation. So, startups will face challenges, likely those we haven't seen before, with mergers likely. The dynamic interplay of technology and business is sure to define GenAI's future.

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