Mr. David Lee:

PwC would like to thank the joint committee for this opportunity to contribute to its deliberations on the impact of AI on businesses. By way of introduction, I am a partner in PwC Ireland and have over 30 years technology consulting experience gained in the Irish market and internationally. I am the chief technology officer in PwC Ireland and I am responsible for the operation of our GenAI business centre that we established in collaboration with Microsoft in November 2023. The purpose of our centre is to provide organisations with the opportunity to understand the potential impact of GenAI and AI more broadly on their businesses from an opportunity and risk perspective. We also look to help organisations to assess the ethical, data privacy and human impacts arising from the adoption of AI within their organisations.

Since our launch, we have had over 70 Irish based organisations engage in workshops and discussions in our centre. These organisations represent all facets of the Irish economy, from large FDI organisations through to indigenous Irish companies. They also represent a diverse range of business sectors, from medical device manufacturers to financial services organisations. My observations are based on the aggregated experience of these organisations and a number of surveys that we have conducted on the topic in the Irish marketplace and globally during the last six months.

Before setting out these observations, I thought it would be useful to first briefly reflect on the term "artificial intelligence" or AI.

“Artificial intelligence” is an umbrella term that covers a wide range of adaptive technologies, including machine learning, digital assistants, predictive models and generative AI. Many of these techniques have been around for decades and are well understood and widely used by many of us in our day-to-day lives; just think of the Netflix movie recommender or Siri. However, tools such as generative AI, or GenAI, are much newer, having been in the public domain for less than two years. GenAI offers the potential to make AI capabilities available to a much wider audience of business users than has been the case to date with other AI technologies. While GenAI technology is still evolving at pace and its impacts on businesses are not yet fully understood, the PwC 2023 GenAI business leaders survey found that 76% of respondents expect GenAI to significantly impact their enterprises over the next five years.

The potential impact on businesses of GenAI and other AI technologies also needs to be viewed in the wider context of a series of factors driving significant disruption to businesses. Considerations such as climate transition, geopolitical uncertainty, the macroeconomic environment and technological disruption, including but not limited to AI, contribute to a position where nearly three in ten Irish CEOs who responded to our 2024 Irish CEO survey are concerned about their long-term business viability, a concern that is even more pronounced at a global level, where 45% of respondents expressed a similar concern. The same survey found that the majority of Irish CEOs see GenAI as a catalyst for business change. Nearly two thirds believe that GenAI will significantly change the way their company creates and delivers value in the next three years. Consistent with the findings of the committee’s report on artificial intelligence in the workplace, which highlighted the importance of upskilling and digital dexterity in transforming the employment landscape, the majority of CEOs recognise that it will require workforce upskilling in the next three years.

However, Irish CEOs also recognise that the adoption of GenAI technologies is not without risk. Over three quarters expect GenAI to increase cybersecurity risks in the year ahead. The majority of Irish CEOs expect that GenAI will increase the spread of misinformation, as well as legal liabilities and reputational risks. We are seeing significant interest from businesses in understanding the implications of the EU AI Act and what they will need to do in order to be compliant with its terms. These cybersecurity-related concerns are consistent with the findings of our 2024 digital trust survey, which found that more than half of Irish respondents expected significant GenAI-enabled cyber events in the next 12 months, but also that a majority had plans to deploy GenAI capabilities as part of their own cybersecurity defence arrangements.

While the findings of the surveys referenced above are consistent with our experience in our GenAI centre, it is also important to highlight that the impact across businesses is likely to vary by sector. Ongoing research by PwC, which looks to assess the potential impact of Gen AI on various industry sectors, categorises industries such as software development and pharmaceuticals, which have a material presence in Ireland, as among the high-potential impact industries.

In summary, we are still in the early stages of understanding the business opportunities and the associated risks presented by the application of GenAI technologies. In this context, it will be important to create a business environment, both from a regulatory and enterprise support perspective, that ensures its application to business is done in a manner that is responsible and human-centric while also ensuring the economic opportunity presented is maximised.