Also: Alphabet’s new CIO, PacWest merger, NatWest scandal. 
Good morning.
In 2017, I wrote a post on the need to retrain millions of Americans for the coming wave of technological change, calling it: “The challenge of our times.” That was before ChatGPT. If it was a challenge then, it is more so now.
The folks at McKinsey Global Institute, whose study prompted my post in 2017, have attempted to attach some new numbers to the change. Generative A.I., they write in a new report out this morning, can be used “to write code, design products, create marketing content and strategies, streamline operations, analyze documents, provide customer service, and even accelerate scientific discovery.” Before generative A.I., their research estimated automation could take over tasks accounting for 21.5% of the hours worked in the U.S. economy by 2030. With the new technology, that number jumps to 29.5%.
The biggest change is for STEM professionals, where automation potential by 2030 jumps from 14% of work hours to 30% of work hours. Similar big jumps occur for education and training work, creative and arts management work, and business and legal automation. The study does not conclude that generative A.I. will lead to a drop in jobs, but rather that those jobs, and the mix of activities they involve, will change dramatically. “Just under 12 million workers may need to find new occupations by 2030,” the report says. The idea is to start preparing now, beefing up training programs both inside and across companies.
Separately, Fortune yesterday released the inaugural Fortune China 500 list. Some companies on it—like No. 1, State Grid, the government-owned electric utility that had $530 billion in revenues last year—already rank high on the Fortune Global 500 list (out in its latest iteration next week). Others, like No. 500—the Inner Mongolia Mengdian Huaneng Thermal Power company, with revenues of $3.4 billion—may be less familiar. But overall, the list provides an interesting snapshot of the world’s second-largest economy.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
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Alphabet’s new CIO
Longtime Alphabet CFO Ruth Porat will be moving to a new role: chief investment officer, overseeing the Google parent’s “other bets,” like Waymo and Nest. The tech giant reported $74.6 billion in quarterly revenue on Tuesday, ahead of expectations, as its search business weathered an advertising slowdown hitting competitors like Snap and Meta. Alphabet shares rose 6% in after-hours trading. Fortune
PacWest merger
Banc of California will merge with troubled regional lender PacWest Bancorp, creating a new bank with $36 billion in assets led by Banc of California CEO Jared Wolff. PacWest suffered from deposit flight earlier this year, as the regional banking crisis spooked customers into withdrawing funds. Shares in PacWest are down by over 70% since banking crisis began in March. CNN
NatWest scandal
Alison Rose, CEO of British bank NatWest, is stepping down following the bank’s controversial decision to close the account of right-wing politician Nigel Farage. Coutts, NatWest’s private banking division, closed Farage’s account after staff decided his anti-immigration opinions contradicted the bank’s position on inclusivity. The U.K. government–still NatWest’s largest shareholder–said it would examine a bank’s ability to close accounts without warning. Bloomberg
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Creating a more sustainable, inclusive, and vibrant San Francisco Revitalizing downtown San Francisco – helping to make it a sustainable place to live and work – is a goal of the Yes SF, Urban Sustainability Challenge, an UpLink challenge launched by Deloitte, Salesforce and World Economic Forum. Entrepreneurs can submit ideas for innovative solutions to renew the city’s urban spaces by August 11 for the chance to receive funding and support. Submit ideas
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Join us live in San Francisco, CA |
Third annual Brainstorm A.I. Conference Join us to examine how the most powerful and far-reaching technology of our time is changing businesses, transforming society, and impacting our future. Join C-suite executives, leading academics, and prominent policymakers as we assess the state of the industry. Apply here. |
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