A recent report indicates that a majority of professional service providers across a range of segments plan to spend more on generative artificial intelligence (GenAI) despite many of them not fully understanding what is, Accounting Today reported.

Fewer than half of the 151 respondents surveyed by Koltin Consulting Group and Pointe Advisory could demonstrate a basic definitional understanding of the differences among generative AI, deep learning and machine learning. Overall, only 41 percent were able to do so.

Those in business consulting demonstrated the best understanding of the differences by a bare majority of 52 percent. This group’s demonstration of understanding topped those in IT consulting (45 percent), legal services (38 percent) and financial services (30 percent).

Despite this lack of understanding, respondents said that they planned to use and spend more on generative AI. Ninety percent of firms have begun to incorporate AI into their strategic planning, particularly those in IT consulting and in larger organizations.

Accounting services (including tax, assurance wealth management, and financial advisory) expect to increase their spending on AI products and services from about 28 percent of their revenue now to 72 percent in the long term, with about 23 percent expected to spend 25 percent or more of their revenue. Accounting services, along with IT consulting, expect to realize greater impact at a faster rate from generative AI than business consulting and legal services, the report found. But accounting services firms are the most concerned about the risks and threats of generative AI.

“Automation and job loss due to AI implementation might create ethical issues around AI taking away jobs,” said one consultant in a survey response. “Finding a balance between AI generation and human interaction and thought will be critical,” said one director.

The intention to invest more in AI when only a minority of professionals have a firm understanding for what it even is may be due to a number of factors, one of the report’s authors told Accounting Today.

"First, we're at the peak of the hype cycle for generative AI, so leaders feel immense pressure to be doing something there, or at least say they are,” said Stuart Ferguson, managing partner at Pointe Advisory. “Second, we do anticipate many of these business leaders will do something with generative AI, but the scope of their efforts will vary wildly, from pilot programs with AI startups on targeted use cases to large scale investments in data scientists to build custom capabilities. Lastly, there is undoubtedly reliance—maybe blind trust?—business leaders are putting into the teams assigned to craft the forward-strategy for generative AI, [but] hopefully they are better informed on the technical underpinnings than the leaders are."