A new report by McKinsey has shown that generative artificial intelligence (AI) could add the equivalent of $2.6 trillion to $4.4 trillion every year. But this would mostly go to developed countries that have already mapped their positions in the AI market. African countries are expected to largely receive very little from the investment.
According to multiple reports, the US, for example, hosts some of the big tech companies at the forefront of the generative AI market. This includes OpenAI the creators of ChatGPT and actively bankrolled by Microsoft; and Google the creators of Bard. Research by Goldman Sachs in March projects that a quarter of the work done in the US and the eurozone would likely be automated. The US also tops the rankings with a score of 85.72 in the 2022 AI Readiness Index, a research conducted by The Centre for Study of The Economics of Africa (CSEA). Singapore with an index of 84.12 and the United Kingdom with an index of 78.54, make up the top three countries globally.
The McKinsey report buttresses the advantage of the US and other developed economies. According to the report, “external private investment in generative AI, mostly from tech giants and venture capital firms, is largely concentrated in North America, reflecting the continent’s current domination of the overall AI investment landscape. Generative AI–related companies based in the United States raised about $8 billion from 2020 to 2022, accounting for 75 percent of total investments in such companies during that period.
Africa however appears not ready for the $4.4 trillion AI economy. The sub-Saharan Africa region’s average score on the Index was the lowest globally at 29.38. Many African countries are also at the lower end of the ranking spectrum. Mauritius (53.38), South Africa (47.74), and Kenya (40.36) occupy the top three positions on the Index.
McKinsey says while funding for generative AI is still a fraction of total investments in artificial intelligence, it is growing rapidly and this is reflective of how quickly its capabilities have developed over a short period. ChatGPT was released in November 2022 and four months later ChatGPT released a new large language model (LLM), called GPT-4 with markedly improved capabilities. By May 2023, Anthropic’s generative AI, Claude, was able to process 100,000 tokens of text, equal to about 75,000 words in a minute—the length of the average novel— compared with roughly 9,000 tokens when it was introduced in March 2023. Bard from Google was launched in May 2023, Google announced several new features powered by generative AI, including Search Generative Experience and a new LLM called PaLM 2 that will power its Bard chatbot, among other Google products.
McKinsey attributes the expected growth in AI investments to the level of pervasiveness the technology has become. AI is now powering many devices from smartphones to autonomous driving features on cars to the tools retailers use to surprise and delight consumers.
“Generative AI applications such as ChatGPT Copilot, Stable Diffusion, and others have captured the imagination of people around the world in a way AlphaGo did not, thanks to their broad utility—almost anyone can use them to communicate and create—and preternatural ability to have a conversation with a user. The latest generative AI applications can perform a range of routine tasks, such as the reorganisation and classification of data. But it is their ability to write text, compose music, and create digital art that has garnered headlines and persuaded consumers and households to experiment on their own. As a result, a broader set of stakeholders are grappling with generative AI’s impact on business and society but without much context to help them make sense of it,” the report noted.