Source URL: https://slashdot.org/story/25/04/09/0912235/enterprises-are-shunning-vendors-in-favor-of-diy-approach-to-ai-ubs-says?utm_source=rss1.0mainlinkanon&utm_medium=feed
Source: Slashdot
Title: Enterprises Are Shunning Vendors in Favor of DIY Approach To AI, UBS Says
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AI Summary and Description: Yes
Summary: The trend of businesses opting for a do-it-yourself approach to AI development poses significant challenges for established software vendors. This shift is driving substantial spending towards cloud computing providers, such as Azure and AWS, while leaving traditional vendors struggling to monetize AI products effectively.
Detailed Description: The text outlines a critical industry shift where established software companies are encountering difficulties as more customers choose to create their own AI tools. This evolution is reshaping the landscape of AI-related spending and altering how businesses source their AI solutions. Key points include:
– **DIY Trend Adoption**: Businesses are increasingly adopting a do-it-yourself approach to building AI tools tailored to their specific needs.
– **Cloud Computing Benefits**: The shift is resulting in a significant inflow of capital towards cloud computing services, with major providers like Microsoft Azure and Amazon Web Services generating substantial revenue from AI services.
– **Revenue Disparity**:
– Estimated $22 billion being funneled into cloud AI services.
– Azure alone accounts for $11.3 billion of this total.
– Traditional software application vendors are struggling, with only about $2 billion in revenues from AI products, dropping to $450 million when excluding Microsoft’s Copilot tools.
– **Reasons for DIY Preference**:
– Specific business needs render generic software less effective or unsuitable.
– Many find off-the-shelf AI products too costly.
– Access to powerful AI models, cloud services, and proprietary data directly reduces dependencies on traditional software vendors.
This analysis highlights the need for traditional software vendors to reassess their strategies to remain competitive in an evolving landscape where businesses prefer bespoke AI solutions over generic off-the-shelf products. AI, cloud computing, and software security professionals should consider the implications this trend may have on market dynamics and innovation in AI technologies.