Good morning.
A.I. has been around for quite some time. But ever since ChaptGPT debuted in November, generative A.I., based on large language models, has been squarely in the spotlight.
My colleague, Will Daniel, explores this topic in his new piece, “A.I. hype could signal the start of the ‘fourth industrial revolution’—or it could be investor ‘FOMO’ warping the market with trillions at stake.”
Some experts are less than enthusiastic. “We’re in a hype curve—a bubble,” Robert Marks, an electrical and computer engineering professor at Baylor University, told Daniel. “And I think that people have to slow down and be a bit more sober in terms of their thinking.”
Marks explained the hype curve. “There’s a rise, then a peak of hype,” he told Daniel. “Then there’s a recognition of the limitations of the new technology, and people begin to realize that because of these limitations, the hype is overdone. And then there’s a depth of cynicism, and that eventually generates an asymptote of reality.”
David Trainer, founder of the investment research firm New Constructs, told Daniel: “I think that we’re seeing just one fad after another. It’s FOMO [fear of missing out] and more and more stocks are moving to ridiculous heights…investors just have to be really careful.”
Meanwhile, there are market watchers who think generative A.I. isn’t all hype. Dan Ives, Wedbush tech analyst, has labeled the rise of generative A.I. technology the “start of a fourth Industrial Revolution. Daniel’s piece delves into squaring the hype with A.I.’s long-term potential. You can read the full article here.
But as the usefulness of A.I. continues to be debated, major companies are moving forward with generative A.I. use in the workplace. For example, I recently spoke with Pascal Desroches, senior executive vice president and CFO at AT&T, about the company’s new internal generative A.I. tool for employees called “Ask AT&T.” But the telecom giant has been using A.I. and machine learning for many years, Desroches told me. A.I. use has been a factor in AT&T’s multiyear effort to save $6 billion. “Not necessarily related to generative A.I.,” Desroches said, but “it’s allowed us to reduce employee efforts by nearly 17 million minutes annually—it’s hundreds of millions of dollars.”
In May, I spoke with EY global payroll operate leader Sheri Sullivan, who is the lead on the EY Intelligent Payroll Chatbot project that uses ChatGPT. It’s currently in the piloting stage and EY plans to launch the chatbot in the fall in its mobile app.
“What we did with this chatbot is we put the regulatory compliance knowledge that we have, the anatomy of a payslip, because most employees don’t understand their payslip structure anyway, and what the different acronyms are and how those relate, and we also put company policies,” Sullivan told me. “And right now, the chatbot is able to go between the three.”
Looking at A.I., Workday’s recent study finds 73% of business leaders surveyed are feeling pressure to implement A.I. at their organizations, and 93% believe humans should be involved in A.I. decision-making, according to the report. (Workday is a CFO Daily sponsor.) Among those using A.I., more than 90% said they currently use the technology within their operations for managing people, money, or both.
Hype or no, I think it’s safe to say that A.I. usage isn’t slowing down anytime soon.
Sheryl Estrada
sheryl.estrada@fortune.com
Big deal
The latest edition of the annual KPMG LLP report, "Tax Reimagined 2023: Perspectives from the C-suite," gauges A.I. usage in the tax and accounting profession. The findings are based on a survey of 500 CFOs, CEOs, and chief tax officers. Fifty-nine percent of respondents said their organization is currently using emerging A.I. technology in the finance and tax departments. Meanwhile, 29% said they plan to in the next 12 months. Of the companies that use or are planning to use A.I., 40% said their organization plans to invest $10 million or more in A.I. capabilities in the next year to transform their tax departments.
Other key findings: Regarding tax preparation and ESG reporting, just 10% say their organization is currently prepared to share its total tax contributions. And as regulatory bodies in the U.S. and abroad begin to require greater tax transparency, 62% of respondents estimate it will be at least five years before their organizations are mandated to disclose their total tax contributions. And 40% say the greatest risk to disclosing their organization's total tax contributions is giving away competitive intelligence.
Going deeper
"As A.I. Spreads, Experts Predict the Best and Worst Changes in Digital Life by 2035," a Pew Research Center report, finds the experts surveyed have great expectations for digital advances across many aspects of life, such as striking improvements in health care and education. However, at the same time, the experts worry about the darker sides of many of the developments they celebrate, such as problems that have been identified with generative A.I. systems, which can produce "erroneous and unexplainable things."
Leaderboard
Alyssa Levin was named chief financial and business officer at Nkarta, Inc. (Nasdaq: NKTX), a biopharmaceutical company. Levin joins Nkarta from Viacyte, a biotechnology company, where she oversaw financial strategy and planning as CFO and led the company’s merger with Vertex Pharmaceuticals in 2022. Before that, she was CFO and SVP of operations at Tentarix Biotherapeutics, and CFO at Bird Rock Bio, Inc. Levin’s experience also includes financial roles at PricewaterhouseCoopers and The Siegfried Group.
Jason Meggs was named CFO at TriNetX, a global network of health care organizations. Meggs most recently served as CFO at Syneos Health. He led the finance and accounting teams and was also responsible for corporate strategy, information technology, and global deal management. His other experience includes financial auditor at Arthur Anderson and Deloitte as well as various roles at Quintiles Transnational, now IQVIA including global vice president of internal audit.
Overheard
"Twitter is quite vulnerable. Threads is their first real competition since Musk took over. The decentralized alternatives like Mastodon aren't yet ready for prime time."
—Arun Sundararajan, a professor at New York University's Stern School of Business, told Yahoo Finance about Meta's (parent company of Facebook and Instagram) answer to Twitter, called Threads, which officially launched on Wednesday. Instagram’s Threads app, a text-based social media platform, intends to offer a space for real-time conversations online.
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