Nvidia Survey Reveals How Telcos Plan to Use AI; Quantifying ROI is a Challenge

A Nvidia sponsored survey of more than 400 telecommunications industry professionals from around the world found a cautious tone in how they plan to define and execute on their AI strategies.  Virtually every telco is already engaged with AI in some way, although mostly at an early stage.  NVIDIA’s first “State of AI in Telecommunications” survey consisted of questions covering a range of AI topics, infrastructure spending, top use cases, biggest challenges and deployment models.  The survey was conducted over eight weeks between mid-November 2022 and mid-January 2023.

Amid skepticism about the money-making potential of 5G, telecoms see efficiencies driven by AI as the most likely path for returns on investment.   93% of those responding to questions about undertaking AI projects at their own companies appear to be substantially underinvesting in AI as a percentage of annual capital spending.

Some 50% of respondents reported spending less than $1 million last year on AI projects; a year earlier, 60% of respondents said they spent less than $1 million on AI. Just 3% of respondents spent over $50 million on AI in 2022.

The reasons cited for such cautious spending? Some 44% of respondents reported an inability to adequately quantify return on investment, which illustrates a mismatch between aspirations and the reality in introducing AI-driven solutions. 34% cited an insufficient number of data scientists as the second-biggest challenge.

The biggest telco objectives for AI are to: optimize operations (60%), lower costs (44%) and enhance customer engagement (35%).  Respondents cited use cases ranging from cell site planning and truck-route optimization to recommendation engines.

Just over a third of respondents said they had been using AI for more than six months.  31% said they’re still weighing different options, 18% reported being still in a trial phase and only 5% said they had no AI plans at all. Most industry execs say they see AI technologies will positively impact their business – 65% agreed AI was important to their company’s success, and 59% said it would become a source of competitive advantage.

Operators are spending a fraction of their capex budgets on AI projects – last year half said they spent less than $1 million on AI. At the top end, 2% spent more than $50 million in 2021, with that number rising to 3% in 2022.

The latest AI Index compiled by Stanford University puts telcos at the forefront of AI deployment. Using its own data and that from a McKinsey study, it found that the highest level of AI adoption is in product or service development by hi-tech companies and telcos (45%), followed by AI in service operations (45%).

The biggest single application in any industry was natural language text understanding deployed by 34% of hi-tech and telco firms, with 28% implementing AI-based computer vision and 25% using virtual agents.

Factors impacting AI investment decisions for 2023:
  • Moving from proof of concept to production/scale 47%
  • Economic uncertainty                                                    46%
  • Infrasctructure upgrades                                               46%
  • Market differentiation                                                    34%
  • Change in priority of data science                                20%
  • 92% will either increase or maintain their AI spend in 2023.
In the near term, the focus appears to be on building more effective telecom infrastructure and unlocking new revenue-generating opportunities, especially together with partners.  The challenge will be moving from early testing to widespread adoption of AI.






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