When taking stock of the artificial intelligence revolution, so much has changed even since the beginning of 2024. Despite that, companies still need to fully grasp the implications of the technology, as well as how to approach AI investment.

It’s not quite the Gartner Trough of Disillusionment, according to Zeus Kerravala (pictured), founder and principal analyst at ZK Research. But companies have kicked the tires, and the next steps are far from certain.

ZK Research’s Zeus Kerravala talks with theCUBE’s Dave Vellante at HPE Discover.

“Every CIO tells me, their bosses are screaming, ‘We need an AI strategy,’ so they’re investing in the technology,” Kerravala said. “But are we going to wind up in a situation where, without a lack of a roadmap of what to do with AI, you bring the technology, and you spend the money, and then it looks like a bit of a failure, because you didn’t know how to implement it properly?”

Kerravala was joined by theCUBE Research’s Dave Vellante at HPE Discover, during an exclusive broadcast on theCUBE, SiliconANGLE Media’s livestreaming studio. They discussed AI’s impact on the tech industry and Hewlett Packard Enterprise Co.’s differentiation strategy. (* Disclosure below.)

Navigating AI investment amid cost and sustainability challenges

AI and cutting-edge computing infrastructure is driving a transformation in the tech industry, but AI investment isn’t cheap. CTOs are now saying that they’re buying more data center space for the first time in a decade, according to Kerravala.

“You’ve got a lot of conflicting forces, in trying to save money, in trying to be more sustainable. But I’m buying more AI, and I’m buying more data center space, and something’s got to give,” he said. “I’m concerned we’re going to see that in the back half of the year.”

Despite that, a decade from now, AI is likely to be built into everything that we do, according to Kerravala. The path ahead isn’t clear today, but the long-term value is clear.

“It’s a no-brainer. But how you fund it, where you apply it, how you measure the ROI, I think we’re going to see a lot of change in leadership … based on it like we did with the internet and cloud,” he said. “These transitions always create a big upheaval in the business world. And so I think long-term trends are positive, but expect some bumpiness along the way.”

When it comes to HPE, the company’s advantage has to do with its large footprint, according to Kerravala. That involves many leading companies.

“They should be in a prime position to be able to help take a lot of the early adopter customers that are using AI and be able to replicate that across their broad customer base. Their customer base is literally a who’s who of the business world,” he said.

At HPE Discover and at other shows throughout the year, it’s been clear that Nvidia Corp. is the “cool kid in high school,” with everyone seeking a relationship with the company, according to Kerravala. But a lack of differentiation does pose challenges.

“And that’s a concern for the industry, because with the lack of differentiation, then everybody winds up just being a channel for Nvidia,” he said.

Here’s the complete video interview, part of SiliconANGLE’s and theCUBE Research’s coverage of HPE Discover:

(* Disclosure: TheCUBE is a paid media partner for HPE Discover. Neither HPE and Intel Corp., the primary sponsors of theCUBE’s event coverage, nor other sponsors have editorial control over content on theCUBE or SiliconANGLE.)

Photo: SiliconANGLE