What do foundation models mean for business?

The Tech Agenda

What are foundation models? A foundation model is a segment of artificial intelligence in which the core algorithm is created by ingesting massive amounts of data, with a resulting model that can be applied to a wide variety of tasks. Foundation models include OpenAI’s GPT-4, Google’s Gemini, Meta’s Llama 2, and Anthropic’s Claude. And although these examples focus on text and language, foundation models also generate images, video, audio, and multi-modal models that operate in multiple areas, such as speech-to-text-to-image/video and visual Q&A.

What business problems can they address?

Foundation models are an excellent tool for interacting with large volumes of information; generating content, reports, and code; and augmenting and automating tasks. Because their capabilities are so wide-ranging, foundation models can serve as the basis for creating more focused AI solutions via a small amount of refinement, which reduces development time and cost. Hence the name: they are the foundations on which many bespoke AI systems are built.

Foundational models that are coupled with enterprise knowledge, augmented with interfaces to simplify use, and paired with prompts to generate consistent outputs are poised to revolutionize how we work, live, and interact. Foundation models may be most useful in helping with business problems if they are equipped with specific business context and information to narrow the potential range of responses.

How do they create value?

“Foundation models and GenAI can automate and enhance aspects of almost all business operations, from customer services to software development and data analytics,” says Colin Light, PwC UK partner and EMEA and UK Strategy& leader. “But this isn’t the tech solution to every problem, and the value potential varies significantly.”

For instance, in the entertainment and media industries, generative AI is creating content faster and more economically than ever and enabling a new wave of personalized advertising. The ability of foundation models to improve translation and text-to-speech services is reducing the cost of boosting accessibility and opening up the potential to access new customers and markets. Generative AI also can be used to support legal teams with contract analysis, compliance, claims management, due diligence, and many other time-consuming but vital tasks.

ChatPwC is PwC’s internal generative AI tool, built on Microsoft’s Azure OpenAI Service. At PwC, ChatPwC and other GenAI tools—combined with the judgment and professional skepticism of our people—are helping to transform the way we work today and in the future.

But it’s generally agreed that companies are just scratching the surface of the potential to create exponential value through foundation models and GenAI. “As GenAI becomes more powerful and intuitive, we are working with organizations to identify the best opportunities to use it effectively and responsibly, while supporting the mindset shift needed among their teams to build trust in the technology and realize its full potential,” Light explains.

To capitalize on the opportunities generative AI presents, businesses must balance a responsible approach with an eagerness to experiment, think bigger and bolder, and be willing to learn. Users of generative AI must apply a critical assessment of generated content and take responsibility when utilizing that content. Businesses need to find effective ways to leverage the benefits of generative AI while minimizing the risks. PwC’s Responsible AI tool kit is a guide to help clients navigate potential AI risks regarding performance, security, controls, the economy, society, and enterprise.

Who should be paying attention?

Given the current speed of development of AI-related technologies and use cases, everyone in a leadership position should be paying attention, regardless of their industry or functional specialty. However, some industries—such as pharma, media, and any businesses with a heavy focus on R&D—have greater potential for GenAI value creation than others.