Enterprises Are Shunning Vendors in Favor of DIY Approach To AI, UBS Says
Established software companies are facing a challenge as many enterprises opt to build their own AI tools rather than purchasing vendor solutions. This trend is driving significant spending towards cloud computing services but is hindering traditional software vendors’ growth in the AI sector.
Key Points
- Many established enterprises are choosing to develop their own AI tools instead of buying from software vendors.
- Cloud providers like Microsoft Azure and Amazon Web Services are benefiting from this trend, with an estimated $22 billion in AI services revenue.
- AI application vendors have seen limited revenue, earning only about $2 billion collectively, with significantly less outside of Microsoft’s Copilot.
- The DIY trend is attributed to the specific needs of businesses that generic software cannot meet and the high costs of off-the-shelf AI products.
- Access to essential components like AI models and cloud computing resources is more readily available, reducing the reliance on traditional software packages.
Why should I read this?
This article sheds light on a pivotal shift in how enterprises approach AI implementation, steering them away from traditional software vendors towards self-sufficient solutions. It highlights critical trends in the AI landscape, which are essential for stakeholders, investors, and technology enthusiasts to understand the evolving market dynamics.
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