WeFi, a leading provider of IT finance solutions, brings attention to growing interest in sovereign and enterprise AI. These deals represent billions of dollars in opportunities for technology vendors and resellers, who can leverage modern channel finance solutions for better access to credit and financial liquidity.
“Governments and enterprises are localising more of their data and AI because nobody wants to move their proprietary data offshore
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Taking control of AI
Governments and enterprises are becoming increasingly bullish about AI. According to a new EY AI Pulse survey, many enterprises are doubling their AI investments compared to three years ago.
Some of this spending will go towards public cloud hyperscalers and AI platforms. However, businesses and governments are also developing internal AI services, motivated by data control, security, governance, specialised use cases, and a growing field of powerful open-source models.
“Governments and enterprises are localising more of their data and AI because nobody wants to move their proprietary data offshore,” says Adrian Liddiard, Co-Founder and Co-CEO of channel finance fintech WeFi. “They want to protect it because that data is their competitive advantage, and they use that data to train AI models—that’s what we’re seeing now.”
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Financing the AI boom
Channel companies anticipate revenue growth from AI sales, according to CompTIA’s State of the Channel 2024 report. However, they worry about financial issues, including the direction of the global economy, inflation, interest rates, increased competition, and pricing pressure.
Sovereign and enterprise AI amplify these financial concerns. They are more geographically diverse, often based in developing markets, and require nuanced access to channel services and support. Sales cycles for their AI use cases will be longer and more complex.
Channel vendors and their networks can expect to support multiple larger deals across different markets with many complicating variables. They must be prepared to float these deals and wait longer to recoup receivables.
“Sales and cash conversion cycles are going to be seriously longer, at least initially, and there’s going to be sizable purchases once they start to make headway. Technology channels are going to need capacity, localised support models, multi-currency management, compliance regulation, tax structures, healthier balance sheets—all those things that enable channel sellers and buyers. Channel finance can be complicated, and sovereign and enterprise AI are going to make it more complicated,” says Liddiard.
Getting ready for the credit capacity land grab
Traditional channel finance models lack appropriate depth and agility for these demands. But modern fintech solution providers hand vendors the financial agility to participate in this broadside of AI opportunities, offering access to capital, management tools, and business intelligence.
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Examples include securing funding from local and international creditors, managing local tax obligations, accessing predictive sales data, automating channel finance processes, and vetting the creditworthiness of buyers.
As AI sales grow in size and value, it will add pressure on credit capacity. Technology channels don’t want to fall short in terms of access to funding, says Liddiard:
“There’s going to be a land grab for credit capacity and credit insurance. People are coming to us now and saying, ‘We need both credit capacity and investment-grade names, but we haven’t even seen growth yet.’ The market is running out of credit capacity, and AI sales are going to add much more pressure.”
Sovereign and enterprise AI projects will spur even greater demand, and channel leaders must prepare to float successive AI-related deals. Channel finance fintechs will help vendors grease those wheels and ride the lucrative wave of sovereign and enterprise AI investments.
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Source: PR Newswire
