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Will AI Impact the Channel? Federal Government AI Spending Hits $3.3B, Private Sector Slides 27%

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At some point, artificial intelligence (AI) is likely to change the way channel partners work with customers and interact with suppliers. For example, AI could be used by partners to accomplish tasks such as streamlining partner programs, leveraging marketing data and basing future strategies on targeted information.

In addition, AI could be used in partner programs to zoom in on potential leads, compliance, insights, partner profiling and other management concerns, as detailed in an AchieveUnite blog on partner success.

Some evidence of the coming wave is offered by federal government spending on AI-related contracts, which touched $3.3 billion in fiscal year 2022, according to data in a new study produced by Stanford University researchers.

Federal Government Agency Spending on AI is Rising

The Stanford AI Index Report’s sixth edition was compiled based on figures supplied by Govini, a data intelligence platform for companies and agencies selling to the public sector. According to the data, federal government agency spending on the technology increased by more than $600 million year on year, up from $2.7 billion in 2021, with the greatest funding going towards decision science, computer vision and autonomy segments.

Total spending on AI contracts has increased by nearly 2.5 times since 2017, when the U.S. government spent $1.3 billion on artificial technology, the report said. The largest increase in AI spending between FY 2021 and FY 2022 was generated by the Defense Department while non-defense U.S. agencies accounted for $1.7 billion for research and development for a slight shift downward, the report said.

How Much Are Private Sector AI Investments?

By comparison, worldwide AI private sector investment was $91.9 billion in 2022, which represented a 26.7% decrease since 2021. The total number of AI-related funding events as well as the number of newly funded AI companies likewise decreased. Nevertheless, in the last decade, AI investment has significantly risen. In 2022 the amount of private investment in AI was 18 times greater than it was in 2013.

Some of the key takeaways from the study include:

  • AI is both helping and harming the environment.
  • The number of incidents of misuse of AI is increasing.
  • Demand for AI-related professional skills is increasing across nearly every U.S. industry.
  • The proportion of companies using AI has plateaued but those that have are pulling ahead.
  • Chinese citizens feel most positive about AI products and services, the U.S. not so much.

Here is one takeaway, according to the report:

"AI will continue to improve and, as such, become a greater part of all our lives. Given the increased presence of this technology and its potential for massive disruption, we should all begin thinking more critically about how exactly we want AI to be developed and deployed."

D. Howard Kass

D. Howard Kass is a contributing editor to MSSP Alert. He brings a career in journalism and market research to the role. He has served as CRN News Editor, Dataquest Channel Analyst, and West Coast Senior Contributing Editor at Channelnomics. As the CEO of The Viewpoint Group, he led groundbreaking market research.