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Beware AI's hidden costs before they bankrupt innovation | TechCrunch

Dec 27, 2023 - techcrunch.com
The article discusses the financial sustainability risks associated with the use of artificial intelligence (AI) and generative AI in businesses. It highlights that while these technologies pave the way for digital innovation, they also lead to unforeseen and undetected cloud expenditures. The increasing costs of cloud infrastructure and applications, which AI heavily relies on, are causing a rise in IT budgets and making investment strategies financially unsustainable.

The article further warns that the hidden costs of AI could potentially lead to AI-cloud bankruptcies by 2024, as they limit the ability of CIOs and CFOs to create new budgets and find internal funding. It also mentions that generative AI is adding another layer of technical debt for many businesses, and under the pressures of constant innovation, the AI cloud could grow at record-breaking speeds.

Key takeaways:

  • Artificial intelligence (AI) and generative AI present opportunities but also financial sustainability risks due to their heavy reliance on cloud storage and computing powers.
  • Cloud infrastructure and applications provide necessary delivery channels for advanced analytics and large language models, but they also lead to hidden costs that can escalate quickly.
  • GenAI is contributing to an additional layer of technical debt for many businesses, potentially leading to financial unsustainability.
  • Hidden costs associated with AI and cloud technologies could potentially lead to AI-cloud bankruptcies in 2024, as they limit the ability of CIOs and CFOs to create new budgets and find internal funding to sustain digital transformation.
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