AI can hurt your business
Glenn Gow with DALL-E(This article is part of a series on Artificial Intelligence for board members and senior executives.)
In June 2023, Yale University gathered 150 founders, CEOs and chairmen of Fortune 500 companies, along with distinguished professors, investors and government officials, to discuss the “threats, hope and hype” of artificial intelligence. Among other lines of inquiry, the organizers asked the distinguished assembly to consider a challenging question:
And the results; 8% of participants thought that artificial intelligence could, in fact, destroy humanity within just five years. Another 34% said it would take 10 years for AI to replace humans. And the remaining 58% believed that this existential concern was overrated.
What’s interesting to me about the poll, however, was another statistic – how many of the participants believed that AI could destroy humanity “within a year.”
The answer to that? Zero. No one. Not a soul in the room worried about the existential threat of artificial intelligence in the one-year timeline.
That’s pretty good news, right?
Well, maybe.
No, it’s not the end of the world as we know it, but—if you’re in charge of your company’s future at all—you should NOT feel good. The changes that are about to come next year won’t destroy humanity, but they may indeed wreak havoc on your business if you don’t take immediate action.
Here are three ways Generative AI can hurt slow movers:
1. Productivity Gap:
I’ve written before about the efficiency and productivity benefits that will accrue to companies aggressively adopting AI. Artificial intelligence has been increasing revenue and reducing costs for some companies for years, in customer service, sales and marketing, product development, software engineering, supply chain management, competitive intelligence and many other areas. (Reading “5 ways artificial intelligence can increase your revenue).
By how much? Well, the National Bureau of Economic Research appreciates it 14% average AI productivity increasewhile some companies profit up to 400%. 92% of large companies realized returns on their AI investments in 2022, while 8% of top AI adopters a full 20% of their EBIT in AI in 2022—and that was before most people had heard of ChatGPT!
This, of course, is only the beginning. McKinsey predicts that only genetic artificial intelligence will add $4.4 trillion in global output annually—more than the UK’s GDP. Clearly, if your organization does not aggressively seek opportunities to implement AI, you may soon find yourself unable to bridge the productivity gap between you and your competitors.
Discover what productivity gains can be achieved with artificial intelligence in your organization and look to be a leader, not a laggard. (Reading “What to do with all that productivity?“)
2. AI-powered cyberattacks:
I have also previously warned about cybercriminals using genetic AI to deceive targets. (Reading “AI Risk Management for corporate boards“) In fact, 75% of security professionals reported an increase in cyber-attacks over the past year, largely attributed to genetic artificial intelligence. Between January and February 2023 alone, there was a 135% increase. to new social engineering attacks, following the release of ChatGPT.
These productive AI attacks include sophisticated phishing emails that use large language models as well as virtual kidnappings which use deep spoofing and voice cloning technology. But AI is also used to select victims and gather useful information about them, to scan code for vulnerabilities, and to write malware that exploits those vulnerabilities. Worst of all, all of this can be done by someone with a very limited skill set, thanks to artificial intelligence.
This may not be an existential problem for your company yet, but the damage a successful AI cyber attack can cause goes beyond the monetary loss. It can also lead to the loss of critical data, reduce the trust of your customers and damage your stock price.
Bring your cybersecurity teams and vendors together today to find out — are you outpacing new AI threats? Or is it the other way around?
3. Lightning stop:
A third threat that corporate executives and board members should be concerned about is the potential for disruption at a speed like we’ve never seen before. Before November 2022, most business leaders had never heard of large language models. The launch of ChatGPT had an almost immediate impact on several industry players. Shares of language learning platform Chegg it fell almost 50% overnight and continued to drop as it became clear that subscribers were leaving the platform for ChatGPT. (As of this writing, Chegg is trading at about 30% of its 2022 share price.)
It took 13 years from its inception for Netflix to drive Blockbuster video into bankruptcy. It took at least five years for Uber and AirBnB, respectively, to significantly impact the transportation and hospitality industries. But while technology has been key to disrupting many industries over the past two decades, it’s clear that AI has the power to create massive disruption in record time—even for the mighty Google.
AI disruption is already underway, both with new AI methods like ChatGPT that you know about, and a dozen more developments that you don’t. Experts have identified healthcare, banking, logistics, insurance, customer service, e-commerce and more industries as particularly vulnerable to a lightning strike. Although it may not seem like a “code red” today, Ernest Hemingway explained how this type of bankruptcy occurs in The sun also rises: “Two ways: Gradually, then suddenly.”
Research what’s happening in AI and consider where your organization might be vulnerable to disruption. (Reading: “If ChatGPT can disrupt Google in 2023, what about your company?”)
No, AI will not “destroy humanity” in a year, if ever. But we will see shocking changes in the business landscape, with some players rising and others falling. You may be out of control and find yourself on a path of declining revenue with no way out. It really isn’t enough to “do enough” of it. I encourage you to make AI a topic of discussion at every board meeting and executive huddle.
If you’re interested in how AI defines business winners and losers, how you can leverage AI to benefit your organization, and how you can manage AI risk, I encourage you to stay tuned. I write and speak about how senior executives, board members, and other business leaders can effectively use artificial intelligence. You can read previous articles and be notified of new ones by clicking the ‘follow’ button here.
