Also: a company with no layoffs, Hong Kong's internet, Netflix crackdown
Good morning.
We gathered another virtual panel of CEOs this week to share their early learnings from using generative A.I.—a topic that continues to dominate management and board meetings. PayPal CEO Dan Schulman kicked off the discussion with these observations:
“I do think that we are likely underestimating the impact that it will have. It will be pretty massive. For instance, we’re doing a lot of experimentation in code development right now, and we’re seeing a 30% improvement in productivity. Across all industry, front office, back office, you’re going to see 30% to 40% productivity increases.”
Schulman said the even more exciting possibilities come from using the technology to create new value for customers. And many small and mid-sized companies are finding that existing large language models allow them to drive change quickly. Here’s DataRobot CEO Debanjan Saha:
“A.I. has been around for a long time, but it required some statistician or mathematician to explain to people what it does. Not with generative A.I. It’s text in, text out. Everybody understands what it is, and a lot of people are trying to do it. Many use cases that are too small for people to build a special purpose applications are becoming really, really easy to do right now.”
Mark Newman, CEO of Chemours, added his industry’s perspective:
“As a chemical company…I believe our biggest opportunity is in the development of new molecules. We are in the business of material science, developing new chemistry, either for the energy transformation or for more sustainable thermal management. We’re in the early innings of using generative A.I. to do that.”
And Jeff Tarr, CEO of Skillsoft, the learning platform, said:
“Amost every customer conversation now starts with the need to prepare the workforce for this technology. Because every knowledge worker, if they’re not using it already, will be using this in some form or fashion in their jobs. And if we didn’t have a skills gap before, we sure have one now.”
But many large companies are still moving cautiously. Jason Girzadas, CEO of Deloitte U.S., cited the recent CEO poll that Fortune and Deloitte conducted highlighting some of the obstacles:
Large companies need “to develop more enterprise-level use cases. And then concerns around security and privacy and risk are absolutely paramount, in addition to the impact on the work force.”
(Deloitte sponsors this newsletter.)
Noting the difference in adoption rates between large and small companies, Principal Financial Group CEO Dan Houston said:
“The speed of adoption of A.I. is directly proportional to the size of your legal department. Larger companies are getting the brakes put on by the legal and regulatory department.”
Slalom CEO Brad Jackson agreed:
“I think, first, the barrier is going to be cost, and then privacy, and then ethics and then legal. But I think the big thing that’s going to happen here is this fear of going first, because of the brand risk.”
Either way, all agreed, the revolution is coming.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
|
|
|
No layoffs
Lincoln Electric, founded in 1895 and worth $12 billion, hasn’t laid off a single employee since 1951, thanks to a unique bargain between the company and its employees. Workers agree to let Lincoln change their working hours according to demand and pay by piecework rather than by hour in exchange for the company promising not to fire anyone for lack of business. Fortune
Hong Kong's internet
A Hong Kong court ruling due Friday could represent an early threat to the city’s open internet. The government is asking the court to ban the broadcast and distribution of “Glory to Hong Kong,” a song popularized during the city’s 2019 protests, on national security grounds. Western tech platforms like Google, Meta and Spotify—available in Hong Kong, but not mainland China—may be forced to consider how to comply with the new legal threat. Fortune
Netflix crackdown
Netflix’s password sharing crackdown may have worked. The company added 6 million s last quarter after the streaming company began to hassle users to get their own accounts rather than freeload off another household’s. Still, Netflix shares sank 8.3% in after-hours trading as the company’s $8.2 billion in quarterly revenue fell short of analyst expectations. The Associated Press
|
|
|
Evolving board equity and representation According to a recent report from Deloitte and the Alliance for Board Diversity, 22% of Fortune 500 board seats were held by individuals from underrepresented racial and ethnic groups, up from 17.5% in 2020. While this shows improvement, the level of representation in the Fortune 500 lags the Fortune 100. Explore additional key findings from the Missing Pieces Report here.
|
|
|
FORTUNE Brainstorm A.I. convening on December 11-12 |
How will A.I. affect you? Join Fortune for the third annual Brainstorm A.I. conference to delve into the hype and hysteria. Explore its potential to mimic human behavior and the far-reaching implications as it advances. Click here to learn more. |
|
|
Thanks for reading. If you liked this email, pay it forward. Share it with someone you know. Did someone share this with you? Sign up here. For previous editions, click here.
To view all of Fortune's newsletters on the latest in business, go here.
|
|
|
|
 |
|
