Equinox Group CEO Bernard Mallia has warned that Malta’s larger businesses are still behind in terms of adopting and integrating artificial intelligence (AI) into their operations, despite increased awareness about the need to do so.

In recent years, AI has dramatically intruded on the business landscape, with companies recognising the added benefits that such emerging technologies present in terms of efficiency, productivity, and human resources. However, despite many businesses acknowledging these advantages, noting that AI is critical to the success in the future of work, international studies have found that businesses continue to lack the skills needed to implement the technology. Further, 73 per cent of business decision-markers are feeling increased pressure to adopt AI and machine learning (ML).

Locally, an assessment of the way AI has been implemented in Malta hinges on four different viewpoints: technological adoption, technological development, regulatory environment, and impact on economy and workforce, Mr Mallia said when contacted by this newsroom.

Mr Mallia, an IT specialist, has been at the helm of Equinox Group since 2008, and is also Director of its education providing subsidiary Equinox Academy. Equinox Group is comprised of companies specialising in business advisory and education within various areas, including technology such as big data, business intelligence, AI, and the Internet of Things (IoT).

He explained that in terms of technological adoption, Malta’s businesses, particularly in sectors like finance, iGaming, and tourism, have expressed a “growing interest” in AI technologies, especially in terms of using AI for data analysis, customer service, and operational efficiency.

Despite this, the extent of the adoption depends on the sector and the size of the business.

“While one would have expected larger businesses and tech-savvy startups to have integrated advanced AI solutions first, this is, on the basis of anecdotal evidence of which I am personally aware, only true for tech-savvy startups. Larger businesses are lagging behind significantly despite increasing awareness,” Mr Mallia said.

He pointed out that smaller businesses are also in the “early stages” of understanding and adopting such technologies, yet given the increasing popularity of ChatGPT, MidJourney and Runway, there has been a “notable and abrupt uptake”.

When it comes to technological development, he remarked that Malta has invested “significantly” in digital infrastructure, “a fundamental prerequisite for advanced technological development”. However, there are other issues such as a possible “brain drain” within the technology sector, as more specialists are venturing abroad, together with long waiting periods for AI-specific educational courses to become available.

Malta’s regulatory environment has encouraged AI investment and development over the years, yet the proposed EU AI Act, aimed at regulating AI by classifying it under four risk levels, will “go a long way in denting AI investment in the EU, including Malta”, Mr Mallia said. He remarked that it is “undeniable” that this is a “developing threat” to AI investment.

“The key challenge for both the EU and Malta’s regulations is balancing the need to protect consumers and society from potential AI risks without stifling innovation,” Mr Mallia commented. While regulations are needed to address ethical concerns, privacy issues, and potential biases, overly stringent regulations could hinder the development and deployment of AI, especially for smaller businesses. This could lead to these entities taking their development “totally outside of the EU, which ironically results in the exact opposite of what the AI regulatory framework was designed to protect against,” he added.

Additionally, AI adoption also faces threats related to the impact it will have on the workforce, with many business leaders cautious about the extent of the reskilling and upskilling required for employees to efficiently make use of AI.

As previously mentioned, AI is constantly developing and changing. Mr Mallia explained that Malta’s business landscape is showing “promising signs for the new wave of AI”, yet there are still “many critical areas” that require further investment to fully leverage AI’s potential.

“In terms of awareness, I believe that Malta has done a very good job. However, this was also the case with blockchain, where a lot of buzz was generated and then it fizzled out into thin air, even though blockchain at the time was not ready to deliver on its promises, which it now is due to further technological development, something which is not the case with AI,” Mr Mallia affirmed.

The release of ChatGPT has continued to boost interest in AI, with the AI-powered chatbot leading to more businesses to contemplate whether they should integrate it into their operations.

Mr Mallia said chatbots present a number of opportunities to businesses including enhanced customer service, data analysis and insights, content generation, automation, personalisation, and innovation. However, it also poses plenty of threats, such as the reliance on the quality of data inputted, ethical and privacy concerns, confidentiality, lack of human touch, misinterpretation, integration challenges, managing expectations, as well as security risks.