AI expanded beyond chatbots and into software solutions and agents in 2024

The news: While 2023 saw the emergence of various general-purpose generative AI (genAI) chatbots after OpenAI’s ChatGPT release, including Microsoft’s Copilot, Google’s Gemini, Meta’s AI, and Anthropic’s Claude, 2024 saw a shift toward specific use cases.

AI chatbots served as a gateway to AI workflows, but businesses and consumers quickly found prompt-based interactions tedious and results sometimes riddled with hallucinations. Realizing this, AI companies and software providers tightened AI’s focus, and productivity became the pathway to enterprise adoption.

From chatbots to AI agents and integrations: While most businesses faced the prospect of wrangling these AI tools into their processes, companies like Salesforce, Microsoft, CrewAI, Artisan, and Zendesk quickly productized AI agents for specific business use cases. 

The resulting trend could be a diversification away from general purpose AI chatbots to more expensive, mission-critical applications.

Google, Apple, and Meta added opt-in AI features to familiar products, driving adoption and potentially paving the way for future AI subscription models to offset costs. 

On-device AI came to PCs and phones: Smaller AI models and the rise of PC and mobile processors with neural processing units (NPUs) now enable on-device AI. 

• That led to Microsoft’s Copilot PCs, Apple’s M4 Macs, and smartphones such as Google Pixels and Apple iPhones touting AI as a key upgrade.
• On-device AI functionality is expected to push adoption and upgrade cycles. However, 45% of US smartphone users are not willing to pay extra for AI on smartphones, per YouGoV.

The companies with the most popular products and largest user-base stand to benefit from AI’s transition away from browser apps to personal computers, smartphones, and wearable devices.

AI meets search: The most impactful development in 2024 is AI’s shift into the search market. Integrating AI-based results into search promises deeper customizations and personalization while challenging Google’s long-standing dominance over search and related advertising. 

Looking forward: OpenAI, Perplexity, and Meta are just some of the companies now running the AI search race, and we expect competition to intensify as AI companies look to disrupt the billion-dollar search segment. The move to more personalized—and actionable—AI-aided search could mark a significant shift away from traditional search.

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