Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Tim Stenovic on Bloomberg Radio. We did say, we did
Speaker 1: promise we're going to that we were going to go
Speaker 1: all in on AI. Today we're living up to that.
Speaker 1: Earlier respect to Ian King about how Nvidia is Wall
Speaker 1: Street's top pic for chat gbt mania. After all, Microsoft
Speaker 1: is investing ten billion in Open Ai, the company behind
Speaker 1: the AI tool chat GBT And I do feel like,
Speaker 1: you know, whether you look at major news, you know,
Speaker 1: the networks, the general network networks kind of just the
Speaker 1: general public. Everybody's like, wait a minute, oh AI is
Speaker 1: going on. I didn't realize it was that smart. Yeah,
Speaker 1: they should have checked in with our next guest, because
Speaker 1: then they probably would have known. Ray. Please step with us.
Speaker 1: Tom Davenport, Professor of Information Technology and Management at Babson College.
Speaker 1: He's the co author of the new book All In
Speaker 1: on AI, How Smart Companies Win Big with Artificial Intelligence.
Speaker 1: He joins us via zoom from beautiful Santa Barbara, California.
Speaker 1: Right now, our professor, good to have you with us.
Speaker 1: How are you, thanks, I'm great, happy to be here. Well,
Speaker 1: we're looking forward to going on this deep dive with
Speaker 1: you when it comes to a I I want to
Speaker 1: start with what Carol was referring to, this idea that
Speaker 1: you know, chat gbt GPT has been all over U
Speaker 1: when it comes to sort of like the conversation right
Speaker 1: the you know what we're seeing out in the environment
Speaker 1: right now with with with not just you know, the
Speaker 1: tech side of things and what happened on Twitter a
Speaker 1: couple of months ago when it was released, but this
Speaker 1: idea that hey, this incredible technology is actually out there
Speaker 1: and it's a lot closer to prime time than a
Speaker 1: lot of people thought. What have your thoughts been around
Speaker 1: all this chat GPT? I've never heard of that could
Speaker 1: tell tell any more about it. Really little joke there. Okay,
Speaker 1: you have to be ripped, Ben Winkled, you know what
Speaker 1: I have to say? Though, up until a week or
Speaker 1: so ago, it wasn't necessarily mainstream. I think that's true.
Speaker 1: I wrote an article for Harvard Business Review, I think
Speaker 1: in November on generative technology than what to do about them,
Speaker 1: and CHET GPT came out a couple of weeks later,
Speaker 1: and the whole category just exploded. Um So I kind
Speaker 1: of wish I'd waited a little while, but Yeah, I
Speaker 1: think that it's a very powerful tool, and I think
Speaker 1: it's going to have a lot of impact on a
Speaker 1: lot of sectors of business and society. Um, I think
Speaker 1: we're gonna have to train everybody how to use it,
Speaker 1: or it will be incredibly unfair to those who do
Speaker 1: and those who what do you mean, what do you
Speaker 1: mean by that? Well, it's a huge productivity aid. It'll
Speaker 1: get only better. And so you imagine two kids in
Speaker 1: school and one uses it for preparing essays and the
Speaker 1: other doesn't have access to it. It's just really unfair.
Speaker 1: And you know, I think any business should be exploring
Speaker 1: it aggressively. Now they're just so many different interesting I
Speaker 1: want to make sure I understand this right. It seems
Speaker 1: like you're saying the person who's who's using it to
Speaker 1: help prepare an essay? To me, you know what, I
Speaker 1: think to lot of teachers or school distructor school administrators
Speaker 1: would say that's cheating. Well, where I think we're gonna
Speaker 1: have to revise that traditional expectation. Um, it's a It
Speaker 1: will be virtually impossible to tell. I guess um. The
Speaker 1: only way you could tell is if you know Johnny
Speaker 1: used to write bad essays and now he writes good essays. Um.
Speaker 1: But um, particularly if someone edits the output of chat,
Speaker 1: GPT or whatever generative a tool they're using. Um, you know,
Speaker 1: I think it'll be impossible to tell and really, um,
Speaker 1: not that ultimately different from you know, going to the
Speaker 1: library and reading books. This is the new equivalent of that.
Speaker 1: But does it get Hey, Tom, do we have to
Speaker 1: think about it? It's interesting. I grew up and I
Speaker 1: had to learn penmanship. I remember practicing writing cursive. You know,
Speaker 1: Um that not necessarily was the case for my daughter
Speaker 1: because everything was being done on computers and is being
Speaker 1: done on computers. And I do wonder is there going
Speaker 1: to be kind of well anybody because of something like
Speaker 1: a chat, g g BT or or other large language
Speaker 1: models l m s. You know that it's not going
Speaker 1: to be so important to be able to write an
Speaker 1: essay because a company can have you know, the chat
Speaker 1: gypt do it. So I just wonder, like, how does
Speaker 1: this change transform our world for the better for the worst. Well,
Speaker 1: you know, there are all sorts of possibilities for mischief
Speaker 1: with it. Um. Right now, it's more the image oriented
Speaker 1: tools that are problematic. Although I have heard that hackers
Speaker 1: are already using um GPT three, the sort of a
Speaker 1: parent of chat gpt to create malware UM code, since
Speaker 1: they can write code. But you know, I think in
Speaker 1: general we're all going to become editors rather than creators
Speaker 1: of first draft and um will be UM, we'll have
Speaker 1: to be prompt engineers and you have to write a
Speaker 1: prompt to get these systems to produce something. We'll have
Speaker 1: to be prompt engineers instead of first draft writers. And
Speaker 1: then we will have to edit it to make sure
Speaker 1: that um A, the information is actually correct. Often it
Speaker 1: is not now and um that it's not. You know,
Speaker 1: it can be a little boring at times. You might
Speaker 1: need to liven it up, but in almost every case
Speaker 1: my experience, uh, it comes up with things I hadn't
Speaker 1: thought of, and um, you know, I'm fairly well educated,
Speaker 1: so I think most people would benefit from it. Does
Speaker 1: this scare you at all? Uh? You know, I try
Speaker 1: to look on the positive side. I think there could
Speaker 1: be some really problematic aspects. But this is UM with us. Now.
Speaker 1: We's not going to go away. We might as well
Speaker 1: get used to it and the cats out of the bag,
Speaker 1: you know. Yeah, it's better than having chips implanted in
Speaker 1: our brain, which you know may happen at sometimes. I
Speaker 1: was going to say that's actually you know, if Elon
Speaker 1: Musk has his way, that's that's coming pretty soon thanks
Speaker 1: to you know, what he's working on. Well. It's interesting though,
Speaker 1: you know, there's been a lot of stories about things
Speaker 1: like AI, and I think in terms of the medical community,
Speaker 1: where it can help screen in an emergency room, right
Speaker 1: and help a doctor, um, kind of prioritize or deal
Speaker 1: with more patients in a smart way. In the investment world,
Speaker 1: you know, startup companies that were maybe deemed too small
Speaker 1: and not worthy of spending some time to you know,
Speaker 1: research whether or not that they were even maybe a
Speaker 1: possible good idea that with the use of AI, that
Speaker 1: can be used as a screening force to allow an
Speaker 1: investor to kind of look at more companies. Like I
Speaker 1: think we have to be smart, right with all of
Speaker 1: this stuff. That technology has its pluses and its minuses,
Speaker 1: but there are things that can maybe benefit the world
Speaker 1: more broadly. Oh yeah, a huge potential applications and healthcare,
Speaker 1: although the adoption in clinical practice has been quite slow.
Speaker 1: You know, Um, once a week you get an announcement
Speaker 1: of research that since an AI system is as good
Speaker 1: as are better than a radiologist or I don't know,
Speaker 1: internal medicine specialists at detecting some UM ailment. So um, yeah,
Speaker 1: lots of of potential value. And you know, I think
Speaker 1: it's going to change a lot of jobs. I don't
Speaker 1: think yet it has reduced UM employment much outside of
Speaker 1: you know, maybe robots and manufacturing UM. But you know,
Speaker 1: the people who are going to lose their jobs will
Speaker 1: be the ones who refused to work with AI. Well, Sam,
Speaker 1: you and I were talking about in terms of the
Speaker 1: healthcare community, right, Like you think about all the research
Speaker 1: that gets constantly you know, done and results and you
Speaker 1: know papers and stuff like how can a doctor who's
Speaker 1: taking care of patients possibly read it all? So you
Speaker 1: think about if AI can be used as a tool
Speaker 1: to help screen through some of this, I mean think
Speaker 1: about the benefits of it. Yeah, I mean I think
Speaker 1: that's really important case. But I also think, you know,
Speaker 1: one of the problems is is you know what Professor
Speaker 1: Davenport talked about, and it's the idea that okay, well
Speaker 1: you can use chat GPT too. Also you know, create
Speaker 1: malware or or write malicious code. There's you know, there's
Speaker 1: sort of two sides to every coin, professor, So do
Speaker 1: you think there needs to be any sort of regulation
Speaker 1: in this type of technology? I think that for the momentum,
Speaker 1: individual organizations will have to decide, you know, what's our
Speaker 1: policy on the schools. As we were discussing earlier. UM,
Speaker 1: I don't see the US government regulating effectively anytime soon.
Speaker 1: You know, possibly we can see something in Europe, although
Speaker 1: I think this is going to be really difficult to regulate, um,
Speaker 1: even for you know, highly regulatory societies. And I think
Speaker 1: we've already seen apparently some student who used to work
Speaker 1: for open ai has come up with a system that
Speaker 1: the text whether or not a passage was written by
Speaker 1: chat GPT. So um, you know, maybe we'll have a
Speaker 1: sort of ongoing arms race in that regard. Hey, we're
Speaker 1: going to come back with Tom Davenport, professor of Information
Speaker 1: Technology Management at babs In College. His book. He's co
Speaker 1: author on the book entitled All In on AI, How
Speaker 1: Smart Companies Win Big with Artificial Intelligence. And in the book,
Speaker 1: you know, gets into some cases, whether it's a Disney,
Speaker 1: a Walmart, a Capital one of Fiser and Eli Lily,
Speaker 1: how they've been using AI. So we'll talk about that.
Speaker 1: On the other side, Carol Master along with Tim Stanivic
Speaker 1: live in our Bloomberg Interactive Broker studio. Tim just reminding me,
Speaker 1: I've been saying chat GPT, Where the hell did it
Speaker 1: come from? GPT? Potato potato, Carolo tomato coming out of
Speaker 1: my brain. Maybe if you had more experience with AI,
Speaker 1: you wouldn't have made that mistake. Maybe if a I
Speaker 1: was running me, I wouldn't. That's definitely true. All right,
Speaker 1: let's get back to our guest. Tom Davenport, Professor in
Speaker 1: Ormation Technology Management at Babson College, co author of the
Speaker 1: book All In on AI, How Smart Companies Win Big
Speaker 1: with Artificial Intelligence, Still with us via zoom from Santa Barbara, California.
Speaker 1: You know, tell one thing I do want to go
Speaker 1: back to, and it's funny. Um. In the break, I
Speaker 1: went and actually was doing some additional googling and searching.
Speaker 1: Came across the story by Ardina Bass and a colleague
Speaker 1: on kind of what is artificial intelligence? Not so long
Speaker 1: ago when we think about artificial intelligence and sounds so
Speaker 1: sci fi if you will, but it's really not, is it. No,
Speaker 1: It's in you know a lot of devices that we
Speaker 1: use every day. Um. You know, it's I don't think
Speaker 1: there's anything terribly mysterious about it. It's just using technology
Speaker 1: to do things that were ordinarily just done by the
Speaker 1: human brain. And I suppose arguably we've been doing that
Speaker 1: since you know, calculators did long division for us. Who's
Speaker 1: doing this really well, you know, with a lot of
Speaker 1: the attention is kind of Microsoft because of its huge
Speaker 1: and vest smith in open ai and chat GPT. But
Speaker 1: what companies are deploying this technology really well? Well, we
Speaker 1: focused in the book on not on the digital native
Speaker 1: companies because you know, it's relatively easy for them. They've
Speaker 1: been doing it for a while. They didn't have a
Speaker 1: kind of a technical debt, uh, a base of previous
Speaker 1: technologies that they had to deal with. They didn't have
Speaker 1: to UM persuade people that it was important. So UM
Speaker 1: in we found a variety of companies in different industries
Speaker 1: in UM consumer products and retail. There's Unilever um uh uh.
Speaker 1: Kroger quite good at this is this Are they using
Speaker 1: this to help identify what demand is going to be
Speaker 1: in a certain area of the country based on and
Speaker 1: every area, Yeah, and every area of the country. Basically,
Speaker 1: Kroger does a prediction of every skew, every stock keeping
Speaker 1: unit in every store every night to make sure they
Speaker 1: don't have stockouts, and you know that they get the
Speaker 1: product to the store. So that's just too much data
Speaker 1: to ever do well with a human brain. So you
Speaker 1: have to use machine learning to to make those kinds
Speaker 1: of predictions, and they're quite successful at that. They do
Speaker 1: UM over a billion loyalty offers a year based on
Speaker 1: you know, what they think you might want to want
Speaker 1: to buy, if you remember their loyalty program, based on
Speaker 1: what you bought in the past, So they're really good
Speaker 1: at it. Of course, some banks Capital One historically that
Speaker 1: wast analytical bank, and and I think probably the best
Speaker 1: certainly for its size, at Ai Shell air Bus, UM,
Speaker 1: Elevant's Health which used to be Anthem is a health
Speaker 1: insurance company that's really focused on this UM and then
Speaker 1: UM in Canada. Lob Laws are just retailer in Canada.
Speaker 1: UM a couple of banks we found Coacher Bank is
Speaker 1: quite good, UM, DBS Bank in Singapore really fantastic. And yeah,
Speaker 1: I mean less than one per cent of companies, i'd say,
Speaker 1: but good number. But a lot of the big ones
Speaker 1: we've heard of well and what's interesting is you shared
Speaker 1: with our producer Paul. You know. Um, over the last
Speaker 1: five years, companies integrating AI extensively throughout their organizations have
Speaker 1: experienced stock prices averaging four times the performance of the
Speaker 1: S and P five hundred. Yet this AI field group
Speaker 1: accounts for less than one percent of large companies, so
Speaker 1: little perspective. Where's this research? Who did this research in
Speaker 1: terms of the share prices? That was done by Deloitte? Um,
Speaker 1: my co author is the head of AI for Deloitte.
Speaker 1: So why do you think that's happening? Well, you know,
Speaker 1: AI pays off. It means that you have better pricing
Speaker 1: of your products, better offers. Increasingly, AI is and bed
Speaker 1: it into products and services. Um. We talk about Morgan
Speaker 1: Stanley using it for quote next best Action for their
Speaker 1: financial advisors to their to their clients. Um Uh. Some
Speaker 1: companies I think probably couldn't even do what they do
Speaker 1: at all. We talk about a small to medium sized
Speaker 1: company called c c C Intelligent Solutions that can give
Speaker 1: you through companies like USA, can give you an estimate
Speaker 1: of what you're crashed car will cost a fix in
Speaker 1: less than a minute based on image recognition and AI
Speaker 1: and a vast amount of data. I also feel like,
Speaker 1: you know, when we talk about anything data related, Tom
Speaker 1: is that the data is only as good as the input, right.
Speaker 1: And we've talked a lot about biased nous or bias
Speaker 1: excuse me, in terms of in data. And we talked
Speaker 1: about this a lot coming off of the death of
Speaker 1: George Floyd and lack of diversity within our world. I mean,
Speaker 1: it's been a continued story for many, many years. But
Speaker 1: now the data is involved. You know, you do worry
Speaker 1: about how things are skewed. How do we ensure that
Speaker 1: AI is pure? Well, the best companies now, you know, UM,
Speaker 1: you have to move beyond the kind of proclamations that
Speaker 1: we we're going to be you know, responsible with our
Speaker 1: AI and a few policy statements we talked in the book,
Speaker 1: for example, about Unilever, which reviews every AI application before
Speaker 1: it's developed to make sure that it's transparent and fair
Speaker 1: not biased. UM. They have a they have a policy
Speaker 1: that you can't really make any final decision for UM
Speaker 1: a customer, employee, or partner without a human being involved,
Speaker 1: and they make sure that that happens before they build
Speaker 1: the application. M does that work, UM? It has? It
Speaker 1: turns out you know, UM. We keep hearing the same
Speaker 1: bad stories of highly biased UM programs like the Amazon
Speaker 1: one that had a preference for male engineers, where with
Speaker 1: them over and over again, UNI Leaver has only had
Speaker 1: two out of over I think two hundred that really
Speaker 1: violated their policies and they had to go back and
Speaker 1: redo them. All right, we're gonna leave it on that. Hey, listen, Tom,
Speaker 1: thanks for sticking around. We were looking to do a
Speaker 1: deep dive into it since it feels like everybody's talking
Speaker 1: about chat GPT now that I remember how to say
Speaker 1: it UM, but it does feel like all of a
Speaker 1: sudden AI it's getting a lot of attention, and it
Speaker 1: helps to really kind of understand exactly what's going on.
Speaker 1: Tom Davenport, Professor of Information Technology and Management at Babson College,
Speaker 1: his new book All In on AI. He's co author
Speaker 1: All In on AI, How Smart Companies Been Big with
Speaker 1: Artificial Intelligence? Joining us via zoom from Santa Barbara, California.
Speaker 1: What are you thinking? I'm thinking this is going to
Speaker 1: be a serious challenge for parents, for teachers. I still
Speaker 1: think about the academics of it.