The Impact of the Top 3 Strategic Imperatives on the Generative AI Industry

Growth Opportunities in Generative AI

Transformative Megatrends

• Why
  •   Generative AI (GenAI) is a transformative megatrend due to its ability to create content and insights, revolutionizing industries by automating tasks, enhancing creativity, and driving innovation.
  •   This technology is rapidly expanding possibilities across various sectors, from marketing and design to healthcare and finance.
• Frost Perspective
  •   Technology providers aim to offer full-fledged solutions with advanced functionalities and enable deep integrations with enterprise applications, which will drive GenAI adoption globally.
  •   End-user organizations need to understand the potential impact of GenAI in their industries by adopting a measured approach and testing small use cases before investing significantly in GenAI platforms.
  • Disruptive Technologies
• Why
  •   Enterprises are moving beyond training massive large language models (LLMs) and shifting toward smaller, custom-trained models.
  •   Small language models (SLMs) are disruptive because they offer cost-effective, adaptable AI solutions for businesses of all sizes. They enable rapid prototyping, customization, and deployment, democratizing AI access.
• Frost Perspective
  •   End-user organizations need to identify specific use cases where SLMs can add business value.
  •   Platform vendors and service providers should combine SLMs with industry-specific data and services to create unique, high-value solutions. They need to develop high-quality data and invest in in-house capabilities to leverage and adapt SLMs.
  • Competitive Intensity
• Why
  •   GenAI can transform industries and create new markets, attracting a wide range of players, from start-ups to large established companies, all aiming to leverage GenAI for growth.
  •   As a result, GenAI technology vendors and service providers face intense competition, leading to increased innovation and opportunities across the stakeholder ecosystem.
• Frost Perspective
  •   Technology vendors need to focus on developing deep expertise in niche areas and offer specialized solutions tailored to the needs of target customers.
  •   Staying ahead in the GenAI space requires continuous innovation from technology vendors, whether in the latest techniques to differentiate their offerings, collaborate with technology providers and research institutions to reach new markets, or develop cutting-edge models, tools, and platforms to gain a competitive advantage.

Strategic Imperatives

Growth Opportunities in Generative AI

Strategic Imperatives

Companies to Action

• Best Practices
• Frost Radar
• Growth Opportunities
• Growth Generator
• Ecosystem
• Transformation

Growth Pipeline Engine 

• Opportunity Insights 
• Opportunity Solutions 
• Planning & Market Strategies

The Strategic Imperative 8™?

Innovative Business Models 
A new revenue model that defines how a company creates and capitalizes economic value, typically impacting its value proposition, product offering, operational strategies, and brand positioning.

Customer Value Chain Compression 
Customer value chain compression as a result of advanced technologies, internet platforms, and other direct-to-consumer models that enables reduction in friction and the number of steps in customer journeys.

Transformative Megatrends 
Global forces that define the future world with their far-reaching impact on business, societies, economies, cultures, and personal lives.

Internal Challenges 
The internal organizational behaviors that prevent a company from making required changes.

Competitive Intensity 
A new wave of competition from start-ups and digital business models that challenge the standing conventions of the past, compelling established industries to re-think their competitive stance.

Geopolitical Chaos 
Chaos and disorder arising from political discord, natural calamities, pandemics, and social unrest that impact global trade, collaboration, and business security.

Disruptive Technologies 
New, disruptive technologies that are displacing the old, and significantly altering the way consumers, industries, or businesses operate.

Industry Convergence 
Collaboration between previously disparate industries to deliver on whitespace cross-industry growth opportunities.