2024 is the year of AI ROI and Broadcom’s next moves

In a year poised for transformative advances in artificial intelligence, leading technology companies plan to harness its potential, focusing on deployment, economic impact and innovation in the rapidly evolving technology landscape.

What’s interesting is that organizations are going deep into their strategy to unpack what their best narrative and posture is for the future AI wave, according to Furrier. That said, it’s important to remember that even during the pandemic, AI was always at the top of the spending momentum, added Furrier associate analyst Dave Vellante (right).

“Every company says, ‘We’ve been doing AI for a long, long time,'” Vellante said. “And actually it’s true from the point of view of the practitioner. They didn’t do gen AI, but they did AI. I think you’re right, a lot of these companies are going to try to figure out, ‘OK, what does our stack look like?’

The past few months have given glimpses of such plans, including the Amazon Web Services Inc. gen AI stack. But the next year will be critical for companies such as IBM Corp., Oracle Corp., Hewlett Packard Enterprise Co. and Cisco Systems Inc., all of which will have to advance their stories about what’s next.

The big AI question of 2024

While 2023 may have been a year of promise for AI, many see 2024 as a year in which real progress will begin. So, will 2024 be the year of AI ROI?

“I think 2024 is going to be the year of AI deployment,” Furrier said. “You’re going to see people deploy AI and start to rationalize their product portfolios — and get into the unit economy of where the economics will kick in for their business.”

The biggest AI “aha moment” this month for Furrier had to do with AI and increasing tech literacy. Soon, the world will see the impact of AI on the average consumer, where applications will begin to integrate into the life of an average citizen, he explained.

“I think it’s going to force businesses to make sure that their customers, the people who use technology, have literacy,” Furrier said.

As a result of productivity strategies from a year ago, companies aiming to reduce spending have focused primarily on consolidating and eliminating redundant suppliers, according to Vellante. That changed today. Currently, companies are reducing staff.

“Now, I don’t have data that necessarily indicates that it’s cause and effect, ie AI is enabling companies to reduce that staff,” Vellante said. “It’s either aspirational or they think they’re going to be able to reduce staff because of AI — or it’s actually happening.”

Many tech companies may say they need to cut a percentage of their staff and then push AI into an organization to make up for it. According to Vellante, this could speak to Furrier’s earlier point about deployments taking place this year.

“It’s going to affect … IT spending,” he said.

Broadcom’s game plan is starting to play out

In early December, Broadcom Inc. announced it will let go of more than 1,800 VMware Inc. employees amid an effort to boost earnings. Broadcom’s plan to move forward was well received by Furrier.

“Broadcom has a chip business, and they have a software business – VMware as a software part of their business,” he said. “What I like about Broadcom is that they’re looking at their system architecture, and they’re just innovating faster.”

Competitors to Broadcom will have to match the speed of the company’s technical innovation, Furrier added. It’s hard to do since Broadcom changes the game quarterly with new developments.

“It goes faster, and it’s cheaper,” he said. “You add software to the thing, you have chip to app, and that’s what VMware has cemented. All the acquisitions do on the software side for Broadcom is give them more software in the stack. I think Broadcom will be a formidable player in that chip-to-app area.”

Check out the full podcast below to find out why these industry benefits were mentioned:

Julie Sweet, CEO of AccentureAlan Cohen, General Partner at DCVCMeg Whitman, Former President and CEO of HPE, US Ambassador to KenyaAndy Jassy, ​​President and CEO of AmazonPat Gelsinger, CEO of IntelKumar Sreekanti, Enterprise Partner at Atlantic Bridge ServicesSanjay Poonen, president and CEO of CohesityHock Tan, president and CEO of BroadcomSteve Jobs, co-founder and former CEO and chairman of AppleMichael Dell, chairman and CEO of Dell TechnologiesHowie Xu, SVP of engineering and AI/ML at Palo Alto NetworksBrett Hannath, CMO of Intel

Don’t miss the latest episodes of “theCUBE Pod”. Join us by subscribing to our RSS feed. You can also listen to us on Apple Podcasts or on Spotify. And for those who prefer to watch, check out our YouTube playlist. Tune in now and be part of the ongoing conversation.

Photo: SiliconANGLE