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
