NTT’s CFO says energy consumption and pricing are top challenges for enterprise generative AI

International telecommunications giant NTT expects that energy consumption of generative AI models and value-based pricing will be among the most significant challenges facing enterprises as they move towards more broad adoption and integration of the burgeoning technology.

In a panel discussion at the VentureBeat Transform 2023 conference on Wednesday with NTT VC founding partner Vab Goel, NTT’s CFO and senior EVP Takashi Hiroi predicted that new guidelines and resilient global systems will help mitigate some of the harms foreseen by experts today.

“This approach is not different from building conventional system integration systems,” said Takashi. 

>>Follow all our VentureBeat Transform 2023 coverage<<

AI for IT support

With revenues nearing $100 billion — a significant chunk of that in the system integration market and 100,000 enterprise customers — NTT is no stranger to implementing AI in its various verticals. 

Founded in 1987, NTT Group now operates globally across over 70 countries and counts more than 300,000 employees. The company provides a diverse range of technology solutions and services including network, cloud, data center, mobile and IT management. NTT Group has continuously evolved from its telephone roots to become an innovative player in emerging technologies like 5G, AI, IoT and quantum cryptography. Through its Silicon Valley arm NTT VC, it invests globally in early stage technology startups.

Already, NTT Group leverages OpenAI’s popular text-to-text large language model (LLM) ChatGPT for IT support in Japan, an AI-based translation service Cohota, as well as marketing data services with behavior forecasting. 

Edge-based computing the way forward

The telecom giant is focused on research to solve the growing energy needs of edge-based computing to power local AI systems.

“AI needs huge energy consumption and the data processing is as close to the user as possible,” said Takashi. “So we started to provide an edge computing service as soon as possible.”

He continued to say that power from renewable sources will be part of the way forward.

Additionally, the economic challenges of pricing AI services correctly was top of mind for the CFO. Acknowledging the complexity of the matter, Takashi said he didn’t have the precise answer to the question but expected that further understanding of the value AI brings to an enterprise will determine pricing.

“It is interesting as a CFO, I think you think about not only about technology but you think about pricing also,” Goel said in the discussion. “Usually, in today’s world, everything gets commoditized, it’s very competitive. Value-based pricing does not work for most of the companies.”

Similar problems have been solved before

Takashi was less concerned with the perceived threat of AI to employment in general. He noted that the trend toward automation isn’t new. “If you look back at the history of industrial development, in the 1960s automated systems were introduced in countries and has [since] been increasing,” said Takashi. “Yes, we can manage that problem.”

As well, when asked about the ethical concerns that come with the use of AI, Takashi pointed to the video streaming platform YouTube, where there have been ongoing issues, but nonetheless we manage to enjoy these services today. Takashi noted that while it’s an early stage, NTT is developing guidelines to police the use of confidential information in the AI systems.

“AI is created by someone,” said Takashi. “The company providing the system integration services using AI has a responsibility to [deal with] ethical issues.” 

Big and small companies can find synergy

Offering his own views, Goel suggested that smaller AI companies work closely with larger entities which will enable the customers to use their products as soon as possible. 

“I think my advice is to broaden the scope and and really look at some very early stage companies,” said Goel. “Some of them are even at the PowerPoint level. Go-to-market companies are very critical.”

In March, NTT announced a joint venture with Cisco to deploy 5G-based private networks.