John Sviokla, an expert in generative AI and co-founder of GAI Insights, joins the conversation to explore AI's transformative impact on industries. He discusses how organizations struggle to harness AI's potential, especially for those dealing with words, images, and numbers. Sviokla introduces new forms of capital in the digital economy and delves into AI's limitations and strengths, like empathizing with human emotions. He also emphasizes the importance of experiential learning for executives adapting to this rapidly evolving technology.
Generative AI is reshaping industries reliant on WINS—words, images, numbers, and sounds—prompting significant job function transformations.
Leadership's understanding of AI is crucial; executive engagement with AI tools fosters recognition of its opportunities and applications.
The future of competitive dynamics will hinge on firms' abilities to integrate AI effectively, leading to potential oligopolies in various sectors.
Deep dives
The Transformative Power of AI
Generative AI is revolutionizing how organizations operate, significantly affecting both individuals and companies. Understanding the degree to which different roles rely on 'WINS'—words, images, numbers, and sounds—can help identify potential transformations within various industries. For instance, sectors like legal and entertainment—which are heavily reliant on WINS—are poised to undergo major changes due to AI capabilities. This evolution not only alters job functions but also redefines the landscape of business practices and workforce training.
Framework for AI Integration
A framework, known as the WINS framework, has been developed to evaluate how generative AI will impact organizations. This framework assesses how much of an organization's costs are associated with WINS activities and their current level of digitization, helping organizations predict the potential dividends of AI adoption. Companies like JP Morgan and Standard & Poor’s exemplify successful integration by applying generative AI throughout their operations. By classifying various industries and tasks, companies can better strategize the role AI will play in their market dynamics.
The Importance of Hands-on Experience
Executives often struggle with AI implementation due to a lack of practical experience with the technology. Many approach AI with skepticism, unable to recognize its opportunities because they fail to engage with it effectively. To rectify this, organizations should encourage leadership to invest time in using AI tools, thereby fostering a better understanding of their capabilities and applications. Embracing AI as a 'power tool' for enhancing knowledge work is crucial for organizations that wish to remain competitive.
Navigating AI Challenges
Companies face several hurdles when integrating AI into their workflows, particularly concerning the understanding and emotional response from leadership. Most executives do not grasp the full complexity and potentials of AI, which leads to underutilized technology and missed opportunities. By comparing AI to a complex organ rather than expecting immediate results from simple engagements, organizations can better appreciate the potential of AI. It is essential to cultivate a learning environment that allows for experimentation and discovery within the AI context.
The Future of AI in Business
The impact of AI extends far beyond mere automation; it is set to revolutionize how companies interact with their customers and manage operations. As organizations increasingly rely on 'intelligence leveragers'—companies adept in using AI to enhance their capabilities—the competitive landscape will shift dramatically. This trend is expected to create oligopolies in many sectors as leading firms leverage AI to gain significant advantages. Looking ahead, adapting to AI will be imperative for resilience and growth across various industries, from manufacturing to tech.
On this week's Stansberry Investor Hour, Dan and Corey are joined by Dr. John Sviokla. John is an author, executive fellow at Harvard Business School, and co-founder of GAI Insights – the world's leading generative artificial-intelligence ("AI") analyst firm. He joins the podcast to talk all things AI – its investing potential, limitations, and real-world applications.
John kicks off the show by explaining how GAI Insights is helping organizations and communities understand and use generative AI. Currently, many executives don't know enough about it to even recognize its opportunities in the workplace. John says that workers whose jobs involve words, images, numbers, and sounds will be the most impacted by this technology. He also breaks down the three new forms of capital: network, behavioral, and cognitive. When it comes to the latter, businesses are trying to protect their proprietary data and processes today by keeping their AI behind firewalls. (1:46)
Next, John talks about how these AI models are trained, the process of training workers to use AI, and the limitations of AI. One such area AI struggles with is creating new ways to look at a problem. However, it's surprisingly good at empathizing and mimicking human emotions. John then discusses AI's computability, the transformer algorithm, and how AI could impact the broad market. (19:11)
Finally, John describes the four levels of generative-AI adoption. Those in the top level – "intelligence leveragers" – drive value by using AI to build AI. Right now, technology is the only industry with these kinds of companies. But John says that in the next five to seven years, each major industry will have an intelligence leverager. This presents a huge opportunity for investors. John gives several real-world situations across different industries (like pharmaceuticals and financials) where AI implementation will be game-changing. (40:35)
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