Navigating AI: This Week's Business Highlights #5

April 25, 2024

Welcome to the AI Trailblazers Newsletter. Our approach diverges from standard newsletters. Instead of just summarizing AI news, we delve into its takeaways for your business, career, and society, while also sharing specific AI Trailblazer highlights.

Cutting Through AI Hype: What is 'AI-First’

Mass confusion has begun as the adoption of the "AI-first" label without meaningful substance behind it is rampant. This highlights the importance of accurately representing AI technology in business and the potential consequences of misleading claims on public perception and trust in AI. Here are the highlights via Fast Company:

  • AI Fatigue: The prevalence of companies proclaiming themselves as "AI-first" has reached a point of annoyance and skepticism due to its overuse as a marketing buzzword.

  • The AI Masquerade: Many companies merely incorporate basic AI tools like ChatGPT into their operations, falsely claiming to be AI-first, which diminishes the credibility of companies genuinely innovating with AI.

  • The AI Masquerade Part 2: Some businesses superficially add "AI" to their names or switch to .ai domains without genuinely integrating AI into their core operations, similar to the trend of NFT (non-fungible token) boasting during the pandemic year

  • More Discernment: There needs to be more rigor to what constitutes an AI-first company, suggesting that true AI-first companies should develop and utilize custom AI tools and models as foundational elements of their business, rather than relying on off-the-shelf solutions.

AI Trailblazer Takeaways: There is definite FOMO happening in the corporate world when it comes to AI. While there are some who genuinely see it as a future growth driver of their business, there are others who see AI’s potential to add to their corporate valuations by just mentioning it.

AI Reshaping Corporate Boards

AI is reshaping corporate boards, with companies increasingly incorporating AI technology into their board operations and decision-making processes. This Axios article discusses the issue and raises important questions about liability for AI actions. Here are the highlights:

  • AI Integration in Corporate Boards: Companies are increasingly incorporating AI into board operations, with some appointing AI as board observers to enhance decision-making. International Holding Company, for example, has appointed Aiden Insight, an AI observer developed with Microsoft's Azure OpenAI service, which provides real-time insights and guidance during meetings.

  • Lack of AI Expertise on Boards: Despite the growing emphasis on AI in corporate strategies, as reflected in numerous mentions during 2024 earnings calls, only 13% of S&P 500 companies have board members with AI expertise. This shortage of knowledge could hinder effective AI strategy implementation.

  • AI's Role in Enhancing Board Functions: AI applications are not only increasing the pace at which boards need to develop strategies but also improving how they operate. Tools like BoardNavigator combine internal and external data to offer strategic advice, significantly impacting sectors such as energy and finance.

  • New Governance Challenges and Opportunities: The rapid integration of AI in boardrooms introduces new challenges, including questions of liability and the blurring of lines between management and oversight. However, it also promises enhanced analytical capabilities and more timely insights, which could transform traditional board responsibilities and interactions.

AI Trailblazer Takeaways: AI in the boardroom! Things are moving quickly. There is no doubt that more technology in board meetings will only aid executives in making better strategic decisions for their companies. One day, maybe a board could have AI bots as board directors. Thoughts?

Organizational Risk Management for AI

An important MIT Sloan article delves into how organizations are grappling with expanding their risk management capabilities to address AI-related risks. A panel of experts, including academics and practitioners, discusses the challenges and provides recommendations. AI Trailblazers, Co-Founder, Amit Shah, was one of the panelists interviewed for the report.

  • Insufficient Expansion of Risk Management: Over half of the experts from the MIT Sloan Management Review and Boston Consulting Group's international panel believe that organizations are not adequately expanding their risk management capabilities to effectively handle AI-related risks, with many highlighting the rapid pace of AI technology and the dynamic nature of its risks as major challenges.

  • Challenges Outpacing Capabilities: Panelists noted that the swift advancements in AI technology exceed the current operational capabilities of most organizations, leading to insufficient AI risk mitigation strategies. This rapid development also makes it hard to keep pace with necessary risk management updates.

  • Ambiguity and Framework Deficiencies: The ambiguous nature of AI-related risks and the absence of established standards and frameworks for effectively managing these risks are significant hurdles. This situation is exacerbated in smaller organizations that may lack the necessary resources or expertise to develop robust risk management systems.

  • Recommendations for Enhancing AI Risk Management: The report suggests that organizations adopt agile, principle-based approaches to risk management that can evolve with the technology, invest more in risk mitigation tools, and act proactively, regardless of the current regulatory landscape, to better manage AI-related risks.

AI Trailblazer Takeaways: There’s a critical need for organizations to proactively and continuously adapt their risk management capabilities to keep pace with the rapid development and adoption of artificial intelligence technologies. This involves not only investing in updated tools and strategies but also ensuring that their approaches are agile enough to respond to the dynamic and often ambiguous nature of AI-related risks.

What is AI Trailblazers?

AI Trailblazers is a vibrant platform dedicated to uniting marketers, technologists, entrepreneurs, and venture capitalists at the forefront of artificial intelligence (AI). We launched at CES in partnership with The New York Times and hosted our members for an evening of AI programming at SXSW.

This platform is designed to fuel growth, innovation, and career development among its members, who all want to be at the forefront of incorporating artificial intelligence into their businesses and their lives for strategic advantage. More information here.

Quote of the Week

I see “AI won’t take your job, someone using AI will take your job.“ don’t like this frame because:

1) “Your job”’ is more likely to transform over time than be “taken.”
2) Some jobs will really disappear with artificial intelligence.
3) Using AI is going to get easier, it is isn’t a secret priesthood.

- Ethan Mollick, Professor of Management, Wharton