Deloitte: Generative Artificial Intelligence Becoming an Increasingly Prominent Topic Among Board Members

• Generative artificial intelligence will become an integral part of almost all business software that will be available in 2024.
• Agricultural technology can play a key role in food security and environmental sustainability issues.
• Technology companies are increasingly seeking ways to monetize technology and are faced with monetization issues related to advanced technologies.
• It is expected that revenue from women’s sports will exceed one billion US dollars for the first time.

Deloitte has published the 23rd edition of its ‘Predictions in the Technology, Media, and Telecommunications (TMT) Sector,’ highlighting key trends and how they may impact businesses and consumers worldwide. The report touches on the growing influence of generative artificial intelligence, analyzes the complexity of introducing sustainable practices into technology, telecommunications, and semiconductor manufacturers’ business models, and examines new revenue sources arising from the synergy of satellite and terrestrial networks.

– In 2024, the transformative capacities of generative artificial intelligence, the necessity of sustainability, and new revenue opportunities could forever change the technology, media, and telecommunications sector. The coming year will be particularly important for this sector: not only will opportunities for growth emerge, but also unprecedented challenges that will require us to redefine traditional frameworks and tirelessly introduce innovations. Regulatory frameworks and considerations related to artificial intelligence and the environment may prove crucial and determine the pace and type of changes. Leaders must be swift, aware of the shifts occurring, and ready to act decisively to achieve long-term success – says Sanjin Katinić, partner in Deloitte’s business consulting department.

From a Buzzword to Business Value

Deloitte predicts that generative artificial intelligence (gen AI) could transition from a concept circulating in business circles to a reality that reshapes the industry. The report provides an in-depth analysis of the artificial intelligence (gen AI) environment, encompassing infrastructure and cloud service providers, enterprise productivity software, specialized business tools, and engineering and design tools. However, some enterprise users may show resistance to paying additional fees for generative artificial intelligence (gen AI) features.

Generative artificial intelligence will become an integral part of almost all business software that will be available in 2024. Software manufacturers and IT departments are likely to define their pricing for artificial intelligence functionalities in their products. According to the report, based on existing results, an increase in revenue for numerous software manufacturers is projected to reach 10 billion US dollars by the end of 2024, which is an extraordinary achievement in the year of the emergence of a new market, but likely below some expectations, as revenues may primarily be realized in the second half of the year.

The European Union is preparing to introduce extensive regulations in the field of artificial intelligence that will likely impact markets worldwide. In 2024, achieving a balance between regulatory compliance and innovation in the generative artificial intelligence sector is likely. Well-designed policies can result in a conducive investment environment, while key regulations may address issues of consent, bias mitigation, and intellectual property protection.

Ubiquitous Sustainability

Sustainability issues related to the expansion of technology are considered a priority. Telecommunications companies, despite producing only two percent of total global emissions, are actively seeking to further reduce their carbon footprint. Their initiatives include replacing copper pairs with energy-efficient optical fibers, shutting down 3G networks that are major consumers of electricity, increasing the number of electric vehicles in their fleets, and introducing technologies with reduced electricity consumption into the radio equipment of their own 5G networks. Deloitte predicts that telecommunications companies worldwide will be able to reduce their carbon footprint by two percent or 15 million tons of carbon dioxide equivalent in 2024 and 2025.

Several regions may face shortages of gallium and possibly germanium in 2024, as well as rare earth and other elements. This anticipated shortage could have a negative impact as these elements are the foundation of industries and sectors with an annual market value exceeding 250 billion US dollars. Given the challenges posed by trade issues, the technology sector and chip manufacturers need to enhance the resilience of their supply chains by directing additional efforts and increasing investments in electronic waste recycling, digital supply chains, securing supplies, new mines and smelters, and sustainable semiconductor production.

Although the use of electricity, water, and process gases may increase in absolute terms due to the rise in semiconductor manufacturing revenue in 2024, Deloitte predicts a decline in annual average water and electricity consumption, partly due to the construction of new modern facilities focused on sustainable production.

Agricultural technology can play a key role in food security and environmental sustainability issues. Its market is expected to exceed 18 billion US dollars in 2024 and fundamentally change agricultural practices.

All sectors strive to increase profitability through monetization

Technology companies are increasingly seeking ways to monetize technology and are faced with monetization issues related to advanced technologies, particularly software that integrates generative artificial intelligence. While chip manufacturers are capitalizing on the fact that they operate in a market whose value will exceed 50 billion US dollars in 2024, software manufacturers find themselves in a different situation. Consumers are increasingly inclined to use generative artificial intelligence features within software, but the question arises as to whether they are willing to pay additional fees for these enhancements. It is projected that all commercial entities engaged in software production will integrate generative artificial intelligence into some of their products by the end of 2024. Consequently, the main challenge will not be the adoption of technology, but finding a pricing model that corresponds to the value of that function while also being acceptable to the market.

Innovative monetization strategies in the telecommunications sector could expand the traditional service offering. Although most users still rely on terrestrial networks, their interest in device-to-device data transmission and satellite communication for better connectivity within an increasingly extensive ecosystem of satellite and mobile network operators, device manufacturers, and semiconductor producers is growing, aiming to connect the unconnected, enhance security, improve emergency response, and expand the application of the Internet of Things. Providing basic communication services in emergencies, simple text messaging, and monitoring the Internet of Things has already begun. It is expected that more than 220 million smartphones capable of utilizing satellite services will be sold in 2024, for which specialized chips with a total estimated value of two billion US dollars are required.

Video games are a natural vertical for monetization. Partnerships between Hollywood studios and video game development companies aimed at monetizing intellectual property for mutual benefit are becoming increasingly common. Intellectual property is becoming more prevalent across all media formats and is attracting greater audience attention, which will likely increase the overall value of associated franchises. Given the rising costs of video game development and the pressures for innovation faced by traditional studios, collaboration is likely to become increasingly popular.

The entertainment sector continues to exceed expectations

The year 2024 will mark a turning point for women’s elite sports. Revenue from women’s sports is expected to exceed one billion US dollars for the first time, reaching a value of 1.3 billion US dollars in total projected revenue. The main reason for this is the growth of commercial revenues, followed by revenues from television broadcasts and match revenues. Women’s football and basketball will generate the highest revenues, while promising results are also shown by cricket, volleyball, and rugby. Increased investments will not only stimulate revenue growth but will also improve sports performance and opportunities for female athletes at all levels and age groups.

User-customized content will significantly change the sector. Platforms are expected to pay nearly 1.5 billion US dollars for content creation in 2024. Given this increase, there is a risk that the dynamics of the video game sector may be disrupted as cheap 3D content becomes more accessible. This practice could threaten leading games and services, although it will enable everyone to create content and provide better conditions for both platforms and independent creators.

The market for entertainment audio content will soon experience significant growth. This market is expected to exceed revenues of 75 billion US dollars in 2024, representing a seven percent increase in formats such as podcasts, audio content streaming, radio, and audiobooks. Podcasts offer untapped potential when it comes to revenue per user.

– In the coming year, we expect a turning point in the telecommunications sector and the beginning of the end of the constant race for ever-increasing Internet speeds. This will be due to the absence of new demands for increased data transfer speeds from manufacturers of more than 90 percent of the most commonly used applications – concludes Katinić.