Summary of Research Findings

Series of generative AI service releases in 2022 gathered much attention in Japan, prompting companies to adopt generative AI. In this research, a corporate questionnaire was carried out to 538 domestic private companies (of process manufacturing, discrete manufacturing, service industry, distribution industry, and financial industry) between June and August 2023. When asked about the utilization status of generative AI, 1.3% of the respondents said generative AI is “already introduced company-wide”, and 8.6% said it is “partly used by some departments”. Meanwhile, 20.8% said that they are “not currently using, but considering the introduction in the future”. Given the sizeable number of enterprises willing to use generative AI, the number of user companies is projected to increase successively hereafter.

Meanwhile, 3.2% of the respondents said that the “use of generative AI is prohibited”. The emerging technology has not indicated crystal clear usage, nor has it earned enough credibility for data security. It is assumed that there are a certain number of companies that have such concerns over security, such as information leakage. As generative AI spreads more widely to earn public trust, and as intra-company guidelines will be provided, there are chances that the companies currently doubtful about generative AI may embrace it hereafter.

Noteworthy Topics

Vendors Focus on Developing Use Cases

According to vendors, they are receiving many inquiries from user companies that are interested in using AI on a trial basis. However, they worry that the user companies do not fully understand the objective of utilizing generative AI. In terms of gaining a better understanding of cutting-edge technologies, it may be worthwhile to try it anyway. But if generative AI doesn't produce revenue, its application will become less important. There is a concern that the utilization of generative AI will be disrupted when user companies realize they cannot apply it in their business areas.

Meanwhile, there are also user companies that have concrete purposes for utilize AI. If vendors can cooperate with these companies to commercialize the application of generative AI, it may provide another chance for companies that have dropped the use of generative AI to challenge introduction of generative AI. When cloud computing first started to gain popularity, yet it did not spread quickly in Japan. The sluggishness caused Japanese companies to fall far behind overseas companies. For Japanese companies not to lag behind this time regarding the adoption of generative AI, vendors are actively conducting proof-of-concept trials together with user companies that have a clear image of how they can utilize generative AI.

Although generative AI is often used for the purpose of cost reduction, such as business streamlining, it can be combined with various technologies and services. Considering its high technological capability, it should not be used only for cost reduction but also for new innovations (e.g., innovative applications and case studies) to generate profit. However, as utilizing generative AI for profit can cover a wide range of ideas, the practical scenario for penetrating the use of generative AI in Japan is starting off with the accumulation of know-how through its use for the purpose of cost reduction. It is assumed that, only then, user companies can move on to the use of generative AI for profit generation.

It is anticipated that generative AI would be used as a core technology in a wide range of services. This circumstance, however, may make it difficult for vendors to be paid for the generative AI model itself. Vendors will need to develop a business model in which they are compensated for the value realized through the deployment of generative AI. Given the influence of generative AI on user firms and society as a whole, an acceptable paradigm must be devised for the market of generative AI.

Research Outline