I have one word for you. No, not plastics—that was the 1960s. The word, or acronym, is “AI.”
That’s the quick synopsis of the World Economic Forum’s recent conference in Davos. “I think AI is probably the most optimistic story that I’ve heard on the street,” says my colleague, Worth editor Dan Costa. Every Davos seems to have a theme. Once it was “internet of things,” then climate, then ESG (corporate environment, sustainability, and governance practices). Those topics haven’t gone away (well, maybe the internet of things has). But those themes, and nearly everything else, is being seen through an AI lens.
AI is (Seemingly) Everywhere
The WEF’s sweeping Global Risks Report 2024 mentions AI throughout. And, despite the name, the report has many hopeful things to say about how AI can improve aspects of the economy and life. They include streamlining healthcare, making factories and warehouses more efficient, and developing green technologies. It also warns about the ease of creating convincing, tailored misinformation—in the biggest global elections year in the history of democracy.
Davos does not necessarily represent everyone’s reality. But in this case, it does reflect a global exuberance over the power of AI. In the U.S., the S&P 500 has soared to a new high, driven mainly by the so-called “Magnificent 7” tech stocks—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla. AI is central to nearly all of these companies (although Apple is notably lagging). And their stock value has collectively soared 110% since the market’s nadir in October 2022.
AI in a World of Inequality
Not everyone has gotten rich in the past year, however. Oxfam’s “Inequality Inc.” report was an economic mic drop at Davos. It contrasts the top five billionaires (mostly in tech, with some in the Magnificent 7), who have doubled their wealth since 2020, with the nearly five billion people who have gone backwards financially in the same period.
AI will likely play a role in everyone’s economic fate, though the nature of the role is uncertain. Studies from big-name (and well-off) entities, such as Goldman Sachs, have predicted an overall economic boost from AI development, especially the boom in generative AI. And they expect most jobs to be altered (maybe even improved?) rather than replaced.
But the future, as sci-fi author William Gibson famously said, is not evenly distributed. Case in point: a less-than-sanguine survey of economists by the WEF about the global economy. Half said that artificial intelligence is “unlikely” to make developing economies more efficient. And most of the rest thought that any benefits would take at least five years to have a positive impact in those nations.
New Demands for Business Leaders
Even in wealthy countries, there will be perils, and probably a lot of mistakes, in figuring out how best to utilize AI. The scandal at Sports Illustrated is a dramatic example. In an effort to cut costs, the once-venerable magazine employed bots as writers, and lied about it. That led to the ouster of its CEO in December. But he wasn’t the only one to lose a job: Last week, the magazine laid off most of its staff, due to a dire financial situation. Sadly, maybe there is something to the argument that the only way for some companies to stay in business is to employ robots.
Regardless, Sports Illustrated‘s leadership was not grasping the implications of AI and how to use (and not use) it effectively and ethically. It’s an extreme case, but not an isolated one. AI is going to enable, and require, leadership to look at the bigger picture, now that it frees them from much of the analysis and number crunching that managers had focused so much time on. So says insights and strategy firm Penta Group’s CEO Matt McDonald.
“That’s going to be replaced by the increasing need for the EQ [emotional quotient or intelligence] side of the job,” he told Worth at Davos, “for vision, storytelling, alignment of people—especially during a period of such incredible change, not only from a technology perspective, but from a society perspective.”