- Tennessee companies must balance consumer concerns about the safety of AI with the business advantages of AI-powered analysis and productivity tools. Adding to the confusion is a general uncertainty about how to define artificial intelligence.
- Small businesses are more likely to rely on third-party vendors and off-the-shelf AI tools, particularly for cybersecurity.
- When choosing an AI vendor, successful Tennessee companies are thinking about their larger strategic objectives, weighing the potential costs and opportunities of a new AI solution.
In a short eighteen months, we’ve gone from “AI” being the hottest new buzzword to being a regular part of our everyday lives. Half of American adults use generative AI, with 22% saying they use the technology daily. As the national conversation shifts to regulation and oversight— among other signs of government intervention, the White House has released its blueprint for an AI Bill of Rights—many business leaders feel caught in the middle.
On one hand, AI is foundational to modern consumer expectations and central to operational productivity. Yet on the other hand, what business risks might be inherent to an overreliance on artificial intelligence? How are business leaders making decisions regarding the sourcing and implementation of AI? Perhaps more broadly, how are companies thinking about AI in their future growth plans to maintain a competitive advantage?
In our annual business and technology survey, we examined how East Tennessee businesses are approaching staff training, resource allocation, and strategic IT priorities in all departments. For this article, we’re highlighting views specifically related to artificial intelligence — including how business leaders understand it and where they plan to use it.
How Tennessee Companies Are Thinking About AI
Perhaps unsurprisingly, we saw that AI has touched every aspect of the business world in one form or another. Ninety-eight percent of survey respondents say their companies use AI in some fashion with the most common use cases being customer service (50.5%), cybersecurity (31.0%), and content creation (29.4%).
But what is artificial intelligence? Despite how confidently survey respondents reported to be using AI, we observed uncertainty and imprecision in how to define the term. While 47% said AI imitates human intelligence, 29% saw it as primarily an automation of mundane tasks.
Nationally, we see the same flexibility and uncertainty in this definition. The International Organization for Standardization (ISO) calls AI “an engineered system” to generate output, while McKinsey focuses on AI’s “cognitive functions” normally associated with human minds. Are these technologies simply advanced automation, or is it truly accurate to call them intelligence?
We see the impact in Tennessee legislation, including TN SB1711, which requires Tennessee educational institutions to adopt AI use policies, and the ELVIS Act, which seeks to protect musical artists from copyright infringement and the misuse of AI.
With these factors combined, we expect some headwinds in the coming years to enterprise AI initiatives because of the potential negative public perception and uncertainty of how the market will receive “AI-powered” solutions. Many Tennessee companies are hesitant to apply the term too broadly to their operations.
Where Businesses Are Using AI
That’s not to say that Tennessee businesses aren’t finding new ways to use AI to improve their product offerings and streamline administrative processes. Across all survey respondents, 28% say their companies use AI in financial accounting, 23% in human resources and recruitment, and 13% in quality assurance.
Small businesses, in particular, are more likely to rely on third-party vendors or off-the-shelf AI solutions as opposed to developing a tool in-house. Certainly, the AI market feels a bit like the Wild West with so many different softwares and applications popping up each week. Perhaps given the newness of the technology and the lack of regulations, 41% of survey respondents reported concerns about the spread of misinformation with AI tools.
A do-it-yourself option isn’t always feasible, though. Twenty-five percent of companies of all sizes report concerns over their lack of technical abilities to create or maintain AI solutions in-house.
As a result, we’re seeing many Tennessee companies experiment with off-the-shelf AI software, particularly with well-known brand names like Microsoft Copilot. The return on investment isn’t always apparent, however, creating a growing skepticism that AI is worth the near-term costs.
The Challenges of AI Adoption
Beyond the expense of adding AI tools to the business tech stack, many companies we surveyed are unsure of their capabilities to make full use of these new solutions. Small businesses (organizations with less than $10m in annual revenue) were about 20% more likely to express concerns over their team’s technical abilities to leverage AI when compared to larger organizations.
Small businesses were also 40% more likely than larger companies to voice privacy concerns. This indicated to us that many small businesses may be more in tune with consumer sentiment when it comes to AI risks.
Nationally, consumers are generally more aware of AI than most business leaders think, with data privacy, bias, and a lack of transparency and accountability among the most frequently cited consumer concerns. This carries a potential impact for not only IT business strategy but also for product marketing and public relations. For example, consumers may be uncomfortable with the idea of AI systems analyzing their personal data, even if there’s a strong business case for doing so.
The Cybersecurity Implications of AI
This brings us to the question of cybersecurity. Much of the public discourse around generative AI concerns the technology’s facilitation of deepfakes and altered images. Social media is already difficult to trust as a source of truth—how much more so when we live in a world where the faces and voices of public figures are easily replicated to spread misinformation?
From a business standpoint, deepfakes are often central to executive impersonation, sometimes called whaling. Beyond this, many security experts believe that the availability of AI coding tools will increase the prevalence and complexity of ransomware attacks, at least in the near term.
Although large-enterprise security breaches often make the headlines, we’re seeing that global corporations are generally concerned about cybersecurity and investing heavily in cyber defenses. This potentially moves the target to small and medium-sized businesses that may lack the technical resources to stop a sophisticated attack.
Nearly one in three East Tennessee companies that we surveyed are taking preemptive measures to increase their cybersecurity with AI-powered tools, most commonly facilitated through a third-party vendor.
Choosing an AI Vendor
So what’s the process of choosing an AI vendor in East Tennessee? Approximately one out of four survey respondents described their companies as lacking the technical expertise to leverage artificial intelligence tools efficiently. A common thread is a fear of the unknown. As technology progresses quickly, can internal teams keep up with their skill development?
Just as with hiring any external vendor, it’s important to begin the process by defining your goals. Many of the organizations we talk to have questions about scalability and customization: Can you grow with us? Can you provide solutions tailored to our needs? These are fair questions to raise with any AI vendor.
At TenHats, we recommend thinking about your larger strategic objectives. Before adopting a new AI tool, consider how it will be compatible (or incompatible) with your current operating systems. This requires a thorough understanding of your own tech stack. What services are you using, and what technologies drive them? Ultimately, the best AI tool is one you’ll actually use.
Adapt Your AI Strategy with TenHats
Planning ahead on AI strategy helps your company stay competitive while also preparing for new standards and regulations that may arrive in the coming years. We recognize the complexity of this topic and the specific challenges presented for Tennessee businesses.
TenHats is the region’s leading enterprise-grade managed service provider. Our strategic technology advisors help you anticipate your biggest risks and uncover cost-saving opportunities as your business scales. Give us a call to discuss how AI can propel your organization forward in the coming years.
