Download

Generative AI has burst onto the scene following the launch of ChatGPT in 2022. As a concept, artificial intelligence (AI) is not new, and Generative AI represents the latest inflection point in the evolution of AI. However, what is distinctive about Generative AI is the tremendous potential it holds to transform work across industries and boost overall productivity. Taking a more holistic view, Generative AI might not only bring the power of AI itself to the masses but in fact accelerate the wider democratization of innovation. We believe it is a game changer. Although it feels like Generative AI has come out of nowhere, the rise of AI starting in the 1950s and through its significant growth over the past decade. This growth has brought with it a host of potential opportunities and challenges. The first wave of potential opportunities for Generative AI is centered on the technology value stack. Historically, the Silicon layer has been the de facto foundation of almost all technological shifts in the technology value stack, and Generative AI is expected to drive significant growth for compute (i.e., processing power), networking, and memory chips. However, we see opportunities in each layer. In the Infrastructure & Platforms layer, we see the hyperscalers/cloud providers racing today to build the underlying infrastructure that enables Generative AI applications and services, but over time we expect to see higher or more differentiation. When it comes to Models and Machine Learning Operations (MLOps), the open-source community is likely to be a key driver of innovation. Moving further up the stack, we believe nearly all software companies will be impacted in some form by Generative AI, and company-specific execution will be critical. Lastly, we believe Generative AI represents a step forward from ongoing AI/automation initiatives at the Services layer. Opportunities are not just limited to the technology value stack —they are also spilling into sectors outside of technology. To capture the full picture, we extended our analysis to look at the impact of Generative AI across six supersectors. We do this through a two-stage framework to assess risk/reward and apply that broadly across companies and sectors. Our analysis finds the Financials & FinTech supersector to be the most likely to be impacted overall, followed by the Consumer sector. At the other end of the spectrum, Natural Resources & ClimateTech at this stage look the least likely ones to be impacted. Key challenges include those centered around bias, inequality, authenticity, infringements as well as the more debated one underpinned by existential concerns. The emergence of Generative AI has unsurprisingly seen AI as a broader topic become a firm focus for policy makers around the world. However, the regulatory path taken so far has varied. Given the stakes involved, we believe policy and governance evolution will play a defining role. What does the future look like for Generative AI? We investigate the global trends and growth is from the perspective of investment in technological innovation. We do this by analyzing the number of AI-related patent applications over time and across countries. Research papers are also telling, with the total cumulative AI research output increasing 1,300% between 2003 and 2021. Given the importance of AI as a foundational technology, the race is on between countries for scientific and technological dominance.

Generative AI has burst onto the scene following the launch of ChatGPT in 2022. As a concept, artificial intelligence (AI) is not new, and Generative AI represents the latest inflection point in the evolution of AI. However, what is distinctive about Generative AI is the tremendous potential it holds to transform work across industries and boost overall productivity. Taking a more holistic view, Generative AI might not only bring the power of AI itself to the masses but in fact accelerate the wider democratization of innovation. We believe it is a game changer.
Although it feels like Generative AI has come out of nowhere, the rise of AI starting in the 1950s and through its significant growth over the past decade. This growth has brought with it a host of potential opportunities and challenges. The first wave of potential opportunities for Generative AI is centered on the technology value stack. Historically, the Silicon layer has been the de facto foundation of almost all technological shifts in the technology value stack, and Generative AI is expected to drive significant growth for compute (i.e., processing power), networking, and memory chips.
However, we see opportunities in each layer. In the Infrastructure &amp; Platforms layer, we see the hyperscalers/cloud providers racing today to build the underlying infrastructure that enables Generative AI applications and services, but over time we expect to see higher or more differentiation. When it comes to Models and Machine Learning Operations (MLOps), the open-source community is likely to be a key driver of innovation. Moving further up the stack, we believe nearly all software companies will be impacted in some form by Generative AI, and company-specific execution will be critical. Lastly, we believe Generative AI represents a step forward from ongoing AI/automation initiatives at the Services layer.
<img src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/64f7dc62b7581721266e09ae.png" alt="Tech" />
Opportunities are not just limited to the technology value stack &mdash;they are also spilling into sectors outside of technology. To capture the full picture, we extended our analysis to look at the impact of Generative AI across six supersectors. We do this through a two-stage framework to assess risk/reward and apply that broadly across companies and sectors. Our analysis finds the Financials &amp; FinTech supersector to be the most likely to be impacted overall, followed by the Consumer sector. At the other end of the spectrum, Natural Resources &amp; ClimateTech at this stage look the least likely ones to be impacted.
<img src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/64f7dc83c1acef4c8ae226e1.png" alt="Supersectors.JPG/" />
Key challenges include those centered around bias, inequality, authenticity, infringements as well as the more debated one underpinned by existential concerns. The emergence of Generative AI has unsurprisingly seen AI as a broader topic become a firm focus for policy makers around the world. However, the regulatory path taken so far has varied. Given the stakes involved, we believe policy and governance evolution will play a defining role.
What does the future look like for Generative AI? We investigate the global trends and growth is from the perspective of investment in technological innovation. We do this by analyzing the number of AI-related patent applications over time and across countries. Research papers are also telling, with the total cumulative AI research output increasing 1,300% between 2003 and 2021. Given the importance of AI as a foundational technology, the race is on between countries for scientific and technological dominance.

What does the future look like for Generative AI? One way to investigate the global trends and growth is from the perspective of investment in technological innovation. We do this by analyzing the number of AI-related patent applications over time and across countries. Research papers are also telling, with the total cumulative AI research output increasing 1,300% between 2003 and 2021. Given the importance of AI as a foundational technology, the race is on between countries for scientific and technological dominance.

The AI Arms Race

Generative AI represents the latest inflection point in the evolution of artificial intelligence (AI). Although AI is not new, what is distinctive about Generative AI is the tremendous potential it holds to transform work across industries and boost overall productivity. We look at the opportunities for AI not only in the technology sector but across six supersectors. Given the race to dominate in the AI space, we also analyzing research papers and patents by country.

Unleashing AI

Amazon

Apple

Google 

Spotify

Read more at <a href="https://www.citigroup.com/global/insights/citigps" data-link-source="tiny">Citi GPS</a>.

Disruptive Innovations IX

Asia as a Time Machine to the Future

Metaverse and Money 

Unleashing AI 

In some ways, the future is already here. On Citi GPS: Global Perspectives and Solutions, a new podcast from Citi, we’ll dive into the economic trends and drivers of leading innovation to help you embrace the changes on the horizon. From new vertical farming to AI, we’ll give you the insights to navigate in a fast-changing and interconnected world.

Citi GPS: Global Perspectives and Solutions Podcast Series

Citi GPS: Global Perspectives and Solutions Podcast

Artificial Intelligence, or AI, is not new and has origins dating back to the 1950s. The evolution and growth of AI over the past decades has brought a host of potential opportunities, setting the stage for the next turning point: Generative AI.

The History of AI | Unleashing AI

Despite its importance and the impressive technological change that has taken place in the recent past, productivity growth has been slowing down for decades across advanced economies. It is not surprising that industry leaders and academics often refer to the potential of AI technologies as a way to end this downward trend.

AI and Productivity | Unleashing AI

The total cumulative AI research output—that means the number of papers, reports, studies that touch on AI—increased 1,300% between 2003 and 2021. Given the importance of AI as a foundational technology, the race is on between countries for scientific and technological dominance.

The AI Arms Race | Unleashing AI

Community Engagement

Artificial Intelligence (AI)

Banking, Capital Markets & Advisory

Securities Services

Commercial Bank

Citi Global Perspectives & Solutions

Global Insights

Leadership

Private Bank

Treasury & Trade Solutions

Markets

Issuer Services

Citi Digital Assets

Research

Wealth

Services

Column 1

Column 2

About Us

Programs

Knowledge Center

Apply for Funding

Column 3

Column 4

Column 5

Links

Footer

Citi Foundation

Businesses

Our Impact

News

Insights

Investors

Careers

My Account

Para Sport

Emergency

Disclosures

Privacy Notices

Hidden

Citi Gpa

Europe, Middle East and Africa

North America

Latin America

Asia Pacific

Social Welfare Funds

Development Organizations

SOEs

Multilateral Development Bank

Central Banks

Central Governments

Ministry of Finance

Local Governments

Ministry of Foreign Affairs

Regional Development Bank

Fraud Prevention

FinTech

iBuyers

Mortgage

Origination

PropTech

Real Estate

Single-Family Rental

Data

GDPR

Privacy

Regulsyion

Auto

Demand

Food

Industrial

Metals

Russia

Shortage

Supply

Supply Chain

Tariff

Ukraine

Asteroids

Imagery

Logistics

Mining

Moon

Rockets

Satellites

Space

Space-Based Solar Power

Aware

Do No Harm

Impact

Investing

Monitoring

Risk

Sustainability

Taxonomies

Augmented Reality

Cryptocurrency

dApps

DeFi

Metaverse

Money

Virtual Reality

VR/AR

Auction

Disruption

Money Laundering

Online

Regulation

Virtual

Entrepreneur

Equal Opportunity

Equality

Global Growth

Innovation

Venture Capital

Women

Women Entrepreneurs

Education

Eliminating Poverty

Health

Multidimensional Index

Poverty

Standard of Living

Sustainability-Linked Bond

UN SDG

Inflation

Just in Case

Just in Time

Production

Transportation

Charity

Donations

Multiplier

Philanthropy

Service

Technology

Growth & Prosperity

Risk & Resilience

Sustainability & Society

Technology & Innovation

Health & Wellness

Citi Blog

Press Release

Regulatory

Product Marketing

Wealth Publications

Newsletter

Global Markets and Economy

Business Strategies

Community Impact

Wealth Management

Retail Banking

ICG Insight Detail Template

As our premier thought leadership product, Citi Global Perspectives & Solutions (Citi GPS) is designed to help our clients navigate the global economy’s most demanding challenges, identify future themes and trends, and prosper in a fast-changing and interconnected world. 

Keep Exploring CITI GPS Content

Keep up to date with our latest insights.

Subscribe to Citi GPS

gpa-footer

gpa-menu

Citi, the leading global bank, serves more than 200 million customer accounts and does business in more than 160 countries and jurisdictions. Learn more today.

Global Investment Bank and Financial Services | Citi

The AI Arms Race | Unleashing AI

Up Next

Sign up to receive the latest from Citi.