Generative AI: A Threat or an Opportunity? Assessing the potential impact within the South African context.

Generative Artificial Intelligence (GenAI)—AI systems, capable of creating novel content such as text, images, code, and video, has transitioned from theoretical advancement to a practical business tool. 

Its impact is visible across finance, healthcare, education, and creative industries. For South African organisations, especially those in regulated environments, GenAI presents transformative opportunities and corresponding risks requiring nuanced oversight. As of 2025, the global generative AI market is valued at approximately US$36 billion, with forecasts estimating growth to US$356 billion by 2030 (Statista, 2024) and potentially around US$1.3 trillion by 2032 (Bloomberg Intelligence, 2024). 

This is driven by widespread enterprise adoption and continuous innovation in foundation models. The Middle East and Africa region, while contributing just under 2% of this market, is projected to expand rapidly—from US$961 million in 2024 to US$5.75 billion by 2030, growing at a CAGR of 35.7% (Grand View Research, 2024). 

In South Africa, the GenAI market—particularly in enterprise software and services—is forecast to increase from US$27.1 million in 2024 to US$173.5 million by 2030, at an impressive CAGR of 37.3% (Grand View Research, 2024). This growth aligns with global projections that generative AI could contribute between US$2.6 trillion and US$4.4 trillion annually to global GDP by the end of the decade (McKinsey & Company, 2023). 

Financial services are among the early adopters of GenAI. Domain-specific large language models such as BloombergGPT are used for automating credit analysis, financial reporting, and compliance documentation (Bloomberg, 2023). Local FinTech’s in South Africa are leveraging AI to personalise budgeting tools and simulate financial scenarios, although regulators caution against overreliance without transparency mechanisms. 

In healthcare, the creation of synthetic datasets—like Stanford’s RoentGen, which generates lifelike X-rays from text—presents opportunities for research and training without compromising patient data privacy (Stanford Medicine, 2024). South Africa’s health sector, facing personnel shortages, stands to benefit from AI assistants in diagnostics and documentation. 

Education is also evolving with generative AI. Tools such as Foondamate, a South African WhatsApp-based AI tutor, are already supporting students with limited access to educational resources (Foondamate, 2024). Global tools like ChatGPT and Claude have introduced high-context AI tutors capable of summarising entire textbooks or supporting multi-lingual learning. 

In creative sectors, platforms like Midjourney, Stable Diffusion XL, and Adobe Firefly are empowering artists, marketers, and entrepreneurs to create high-quality content in minutes. Adobe reported that over 8 billion images were generated using Firefly in its first year (Adobe, 2024), indicating mainstream adoption. 

However, while these remarkable breakthroughs are indeed awe-inspiring and deserving of celebration, it is equally important to acknowledge that they are accompanied by substantial risks. The following are among the most immediate and pressing concerns inherently linked to the rise of Generative AI: 

• Disinformation and Deepfakes: GenAI models can produce highly convincing fake news or manipulated imagery, increasing reputational risk and exposure to cyber fraud. 
• Bias and Discrimination: Unchecked models may perpetuate racial, gender, or cultural biases present in training data—a serious concern in South Africa’s multi-ethnic context. 
• Explainability and Auditability: Complex model architectures often obscure how outputs are generated, complicating compliance with local laws like POPIA and global frameworks like GDPR. 
• Security Threats: GenAI may be weaponised to craft phishing attacks, automate scams, or exploit software vulnerabilities, creating a new frontier for cybersecurity. 

As such, while not exhaustive, the following strategies are strongly recommended for risk and compliance leaders to begin mitigating the impact of this current—and increasingly complex—technological wave exemplified by Generative AI and its emerging successors: 

1. AI Governance Structures: Establish dedicated, cross-functional AI risk committees comprising stakeholders from compliance, IT, legal, and operational units. These bodies should be tasked with evaluating, guiding, and continuously monitoring all AI deployments to ensure alignment with ethical, legal, and strategic imperatives. 
2. Human-in-the-Loop Oversight: Implement robust human oversight mechanisms by mandating expert review and validation of GenAI outputs, particularly in high-stakes contexts such as customer communications, audit processes, and regulatory disclosures. This ensures accuracy, accountability, and contextual appropriateness. 
3. Use Explainable AI (XAI) Techniques: Incorporate tools such as SHAP (SHapley Additive exPlanations) and LIME (Local Interpretable Model-agnostic Explanations) to enhance transparency and interpretability of AI model outputs. These techniques help stakeholders understand how specific inputs contribute to an AI decision, supporting auditability, regulatory compliance, and trust in generative systems. 
4. Red-Teaming and Adversarial Testing: Conduct proactive stress-testing of GenAI systems through red-teaming exercises aimed at uncovering vulnerabilities such as prompt injection, model inversion, and the generation of harmful or unintended outputs. This approach strengthens system resilience and readiness against emerging threat vectors. 
5. Policy and Access Controls: Develop and enforce comprehensive internal AI governance policies, including clear access controls and usage guidelines, to prevent the unauthorised, unethical, or insecure deployment of publicly accessible GenAI tools within the organisation 

Conclusion 

Generative AI will play a central role in shaping South Africa’s digital economy over the next decade and beyond. While the opportunity for productivity and innovation is immense, it is equally matched by complex ethical, legal, and operational risks. Risk professionals must engage proactively establishing safeguards, building AI literacy within teams, and contributing to policy discourse. As South African companies expand their digital footprint, the challenge is not simply adopting GenAI, but doing so responsibly, securely, and inclusively. 

Disclaimer: AI tools, including OpenAI’s ChatGPT, were used to support research collation, language refinement, and proofreading during the preparation of this document. All content was critically reviewed and curated by a human author. 

References 

Adobe. (2024). Adobe Firefly surpasses 8 billion images generated. Retrieved from https://www.adobe.com/cc-shared/assets/investor-relations/pdfs/101424-adobemax-firefly.pdf 

Bloomberg Intelligence. (2024). Generative AI Market Forecast to 2032. Retrieved from https://www.bloomberg.com/company/press/generative-ai-to-become-a-1-3-trillion-market-by-2032-research-finds/ 

Bloomberg. (2023). BloombergGPT: A finance-specific large language model. Retrieved from https://www.bloomberg.com/ 

Foondamate. (2024). AI-powered education for African learners. Retrieved from https://www.foondamate.com/ 

Gartner. (2024). Top Security Threats from Generative AI. Gartner Research. 

Grand View Research. (2024). Generative AI Market by Region and Industry Vertical. Retrieved from https://www.grandviewresearch.com/industry-analysis/artificial-intelligence-ai-market 

KnowBe4. (2024). MEA Region AI Security Survey Report. 

McKinsey & Company. (2023). The Economic Potential of Generative AI: The Next Productivity Frontier. Retrieved from https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/the-economic-potential-of-generative-ai-the-next-productivity-frontier 

Stanford Medicine. (2024). RoentGen: Generating synthetic X-rays for model training. Retrieved from https://stanmed.stanford.edu/generative-ai-synthetic-data-promise/ 

Statista. (2024). Generative AI Market Size Worldwide 2022–2030. Retrieved from https://www.statista.com/forecasts/1449838/generative-ai-market-size-worldwide