CEO Daily: The A.I. enthusiasm gap

From: Alan Murray - Tuesday Jun 27,2023 10:30 am

Presented by Deloitte

June 27, 2023

Good morning.

Generative A.I. has taken the C-suite by storm in the last six months, as a new study out today from IBM verifies. (CEO Daily got an early look.) Of more than 3,000 global CEOs surveyed, some 75% said they believe competitive advantage in the future will go to those who lead in A.I. For them, the race is on.

Forward-thinking CEOs, of course, have known for some years that the new generation of technologies—cloud computing, an explosion of data, machine learning—were going to transform their companies and their industries. But ChatGPT showed them the power, sparking imaginations in ways previous technology tools hadn’t. It is so intuitive and easy for even a CEO to use. I spent a couple of hours this weekend conversing with Google’s Bard about ideas to grow Fortune Media—and the Bard’s ideas weren’t half bad! And far less costly than a consultant.

But generative A.I.’s ease of use also underscores its limitations. It provides guesses, based on publicly available information, and it can neither calculate numbers nor verify facts. That’s probably why there’s such a gap, according to the IBM study, between CEOs and their teams. While 75% of CEOs are charging toward transformation, only 30% of their team members believe their organization is ready for the change, and only 29% believe they have the needed skills. “There’s a significant disconnect between what the CEO says and what their team says,” IBM’s Jesus Mantas told me. Moreover, concerns are still high around data security, data accuracy, and so-called “hallucinations”—that is, the technology’s tendency to make stuff up. As CaixaBank CEO Gonzalo Gortazar told the IBM team: “Generative A.I. models surprise, impress and scare us, all at the same time.”

CEOs say productivity gains are the top reason for implementing A.I., but they are mixed about the effects on employment. Some 46% say they have hired additional workers due to generative A.I., while 43% say they have reduced workforce. Over the next twelve months, 26% say they will hire more, 28% say hire less. The survey shows they are also concerned by steadily rising regulatory threats.

But while the exact applications remain fuzzy and the effects remain unclear, CEOs are clearly rushing headlong into the A.I. future. “It’s a quantum leap,” says Mantas.

You can read the full study here. Other news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

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This edition of CEO Daily was curated by Nicholas Gordon.

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