Also: Meta's AI reorg, TSMC's Arizona delay, Reddit IPO. 
Good morning.
It would be hard to overstate the degree to which discussions of AI dominated this year’s World Economic Forum in Davos.
While tempestuous politics and geopolitics, the climate challenge, and an uncertain economy all had their place in the formal agenda, every discussion somehow seemed to find its way back to the disruptive technology.
The trend continued last night, when I interviewed Amazon CEO Andy Jassy at Fortune’s annual Davos CEO dinner. I asked him his view of the top risk and the top opportunity for business in the year ahead.
“I think the opportunity and risk are pretty similar. There is this wildly transformative, disruptive technology in generative AI that you can’t get through any conversation without talking about.”
Jassy said for many businesses, the challenge is figuring out where to invest scarce technology dollars.
“I see companies really battling with prioritization. Are they better off continuing with the modernization of their technology platform? Or should they put all their engineering resources into generative AI? Everyone will decide differently. But if you don’t have your technology infrastructure foundation right, you are going to have a hard time being successful with generative AI.”
While the AI discussions tended to dwarf climate discussions at Davos this year, Jassy made the point that the two are closely related.
“These large language models are so power hungry, and there’s just not enough energy right now. So we’re going to have the dual challenge as a group to find a lot more energy to satisfy what people want to do and what we can get done for society with generative AI. But we’ve got to do it in a renewable way, in a carbon neutral or zero way. It can’t be going back to coal.”
While Amazon’s generative AI efforts haven’t gotten as much attention as OpenAI’s ChatGPT—whose CEO Sam Altman was everywhere in Davos this week—Jassy said his company is building around 60 generative AI applications right now, and that the technology “has the chance to transform virtually every customer experience.” He emphasized that the change is just getting started:
“It is so early. This is like three steps into a marathon.”
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
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Meta’s AI reorg
Meta is merging its advanced AI division with its new generative AI group as the social media company pursues “full general intelligence.” Last year, Meta released generative AI chatbots modeled on famous celebrities. CEO Mark Zuckerberg may also be making a play for AI talent, telling The Verge that “a lot of the best researchers want to work on the more ambitious problems.” Fortune
Arizona delay
TSMC's $40 billion Arizona project is facing another delay. TSMC now expects to start mass production at its second Arizona facility in 2027 or 2028, later than its prior forecast of 2026. The chipmaker earlier postponed the launch of operations at its first Arizona plant to 2025. The $40 billion Arizona project is key to the Biden administration’s drive to increase domestic manufacturing of semiconductors. The Wall Street Journal
A Reddit IPO
Reddit is planning for an IPO in March, according to people familiar with the matter. A fundraising round in August 2021 valued the social media company at $10 billion; Reddit confidentiality filed for an IPO a few months later. Reddit’s IPO would be the first from a social media company since Pinterest’s listing in 2019. Reuters
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CFOs: Tech and M&A Signal Hope Deloitte’s 4Q 2024 CFO Signals™ survey reveals 51% of CFOs expecting M&A to spur 1%-10% of their company’s growth in the next 3 years, and 21% of CFOs anticipate more than 11% of growth from M&A. Despite economic and geopolitical factors, plans for Tech and M&A investments signal hope. Read more.
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