Free DownloadWhat is generative AI? Everything you need to know
The potential of AI technology has been percolating in the background for years. But when ChatGPT, the AI chatbot, began grabbing headlines in early 2023, it put generative AI in the spotlight.
This guide is your go-to manual for generative AI, covering its benefits, limits, use cases, prospects and much more.
The advantages of using generative AI cover plenty of ground, with improving customer experience, reducing costs and automating code creation among the key drivers.
Business applications for generative AI have rapidly proliferated since the technology became mainstream in late 2022.
Generative AI (GenAI), as its name suggests, can produce images and text. But that's just the beginning. This subset of artificial intelligence can also automate customer support, help developers write code and develop new products. The technology builds on several developments, including generative adversarial networks and large language models that potentially include trillions of parameters. Such advances let data scientists prep models using vast amounts of training data.
GenAI also stands to get a boost from an ongoing data center capacity buildout. Individual efforts include the Stargate Project, which aims to invest up to $500 billion over four years to build AI data centers in the U.S. President Donald Trump unveiled the initiative soon after his January 2025 inauguration, with the financial backing of investment firm MGX, OpenAI, Oracle and SoftBank. Globally, hyperscale data centers will operate $1 trillion worth of AI-optimized servers by 2028, according to market research company Gartner.
Rapid content creation emerged as an early benefit of GenAI. The ability to generate content, such as business email messages, marketing newsletters and blogs, continues to provide tangible value today.
Gartner expects the media industry and corporate marketing to use GenAI for text, image, video and audio generation. Thirty percent of large organizations' outbound marketing messages will be synthetically generated this year, according to the market research firm. Only about 2% of organizations created such content in 2022.
Content creation, however, has expanded well beyond business correspondence and digital marketing. Filmmakers, for example, now use GenAI. Kennedy Miller Mitchell, a media production company in Australia, uses GenAI to visualize scenes before shooting, using Stability AI's Stable Diffusion and hardware from Dell. The goal is to speed up preparatory work and boost productivity.
2. Improve the customer experience
Customer interaction has become one of the top business applications for GenAI. Companies can benefit from employing chatbots that offer a more humanlike response to customer inquiries. And those responses will have greater depth due to the scale of the underlying language models.
Contact centers and other customer experience touchpoints can use GenAI tools in a variety of ways. GenAI can fully automate Tier 1 support, which deals with routine customer inquiries, said Pablo Alejo, founder of consultancy Copilot. Here, chatbots or other conversational technologies help customers get their answers quickly. The self-service dimension to customer support also reduces a contact center's call volume and reserves customer support agents for more complex issues.
At higher levels of support, Tier 2 and Tier 3, GenAI can augment or support call center employees, Alejo noted. This agent-assist approach uses natural language processing to interpret an agent's conversation with a customer and provides relevant information to support the interaction. "That radically shapes how they operate," he said.
3. Boost business decision-making
Pluses such as boosting customer experience flow into a broader benefit: better business decision-making. When embedded in an organization's processes and data stores, GenAI can deliver critical information at the right time.
"A lot of the AI use cases are about information retrieval," said Arun Chandrasekaran, vice president, analyst and part of the AI strategy team at Gartner. "By using GenAI as part of a workflow," he explained, "you are able to retrieve contextual data."
In the customer support example, agents would traditionally consult with one or more knowledge repositories to determine the appropriate response to a customer's questions. But with GenAI, that agent has a tool that feeds them real-time information to answer complex queries, Chandrasekaran said. GenAI could potentially enhance a range of business decisions in an enterprise. "It enables organizations to move from making more gut-based decisions to making more data-driven decisions," he added.
GenAI's benefits permeate virtually every aspect of business operations.
4. Automate coding
Generative AI tools help software engineers write new code. Popular options such as Anthropic's Claude, GitHub Copilot and OpenAI's ChatGPT have shortened the software development lifecycle for many organizations. "Because of GenAI," Alejo said, "we are able to create solutions at a fraction of the cost at a fraction of the time because one engineer can operate like ten."
Alejo said he has been writing more code with the help of tools such as Claude. "They are game-changing," he said. "Applications that would have taken me a month, I can write in a weekend."
An experiment in which three groups of developers used GitHub Copilot found that recent hires and junior developers were able to increase their weekly task output by 27% to 39%. Developers with more experience increased their task completion by 8% to 13%. The average productivity gain across the three groups -- 4,867 developers in total -- was 26%, according to researchers from Microsoft, MIT, Princeton and the University of Pennsylvania who published their results in September 2024.
5. Drive productivity and cost reduction
The potential for GenAI productivity gains, and the resulting cost savings, cut across a range of business functions.
Software development and customer support are among the likely candidates for increased efficiency. Bill Bragg, CIO at predictive AI and GenAI products provider SymphonyAI, added human resources and legal to the list of applications.
SymphonyAI uses its Eureka AI platform internally to create GenAI applications. The company, for example, built a GenAI recruitment and hiring tool that helps managers compare candidates and match them against hiring criteria. Bragg said using the tool saved him three hours when considering 20 resumes for an open position.
A legal application, meanwhile, evaluates customers' non-disclosure agreements (NDAs) for compliance with SymphonyAI's contractual requirements. The tool lets users load a customer's NDA and prompt it to check for acceptability. The application flags paragraphs that don't meet the company's rules. It will also generate a written response to the customer, based on its findings, saving attorneys' time since they're only called upon to negotiate the specific sticking points on an NDA. "This takes something that is hours a week for some of our attorneys," Bragg noted, "and puts it in the hands of a person working with the customer."
6. Develop new products and services
Businesses also stand to benefit from rapid ideation and the ability to create new products and services.
[GenAI] enables organizations to move from making more gut-based decisions to making more data-driven decisions.
Arun ChandrasekaranVice president and analyst at Gartner
GenAI, for instance, has the potential to accelerate gene sequencing and drug development in the life sciences, Chandrasekaran said. He pointed to Exscientia and Insilico Medicine as examples of startups pursuing GenAI-based drug discovery. Media and entertainment companies can also ramp up product creation using the technology, he added, noting that GenAI is poised to disrupt the economics of movies and TV shows. "The ability to fundamentally do things that businesses very deeply care about is imminent," Chandrasekaran said of GenAI's trajectory.
7. Grow revenue
The launch of new products and services can lead to increased revenue. This GenAI advantage will become more of a factor over time. "In the long run, it can truly have an impact on top-line revenue growth," Chandrasekaran conjectured.
Revenue-boosting opportunities include using GenAI to improve customer satisfaction, resulting in more sales and reduced customer churn. Machine learning algorithms can also analyze customer data to individualize product recommendations to tee up potential sales. This higher level of personalization also helps businesses more easily cross-sell and upsell customers on new products.
GenAI often takes the rap as a security concern, with deep fakes and data leakage among the worries. But it also has the potential to improve security. GenAI tools can analyze source code to find weaknesses and code that the app no longer uses, Alejo noted. "Generative AI will improve the ability for organizations to decrease security vulnerabilities, reduce technical debt and make software more performative," he said.
Industries with a strong client-service focus, such as consulting, could benefit from GenAI. Alejo said the technology can really shine in customer analysis. GenAI can automate the research required to assess a customer's current business profile and desired target markets, kickstarting the process of creating new strategies. The research phase of a consulting project tends to be expensive, Alejo explained. GenAI can reduce that cost, which would let consultants conduct more research to support their clients, he added.
GenAI offers a supplemental benefit to businesses across a wide spectrum of use cases: the reduction of repetitive tasks traditionally parceled out to employees. GenAI tools can take on a host of routine activities supporting various back-office functions, Chandrasekaran said. In customer support, businesses with 24/7 contact centers can use GenAI to handle late-night shifts that are difficult to staff and eliminate the need to outsource those shifts to an offshore provider, he explained. The use of GenAI in this scenario trims costs, he added, since offshoring has become more expensive over the past decade or so.
The technology also offers a more basic advantage when it comes to dull or onerous tasks. "AI doesn't get tired," Chandrasekaran said.
Editor's note:This article was updated in 2025 to reflect the latest developments in GenAI's benefits for businesses.
John Moore is a writer for Informa TechTarget covering the CIO role, economic trends and the IT services industry.
