If Trump is the top topic of conversation in Davos this year, artificial intelligence is a close second. There are literally dozens of panels on the topic scattered around this snow-buried village, as my colleague Adam Lashinsky reported yesterday. There seems to be no-one here who questions the notion that vast amounts of data combined with powerful machine-learning algorithms will not only transform almost every business, but also the way we live.
But while the promise of AI is widely accepted, the practice remains fairly limited. Martin Reeves of BCG reported that his firm, working with MIT, surveyed more than 3,000 companies last year and found that while 85% of them believed AI would become a competitive advantage in the future, only a quarter were implementing it now, and only 5% were implementing it extensively. On the same panel, Renault-Nissan CEO Carlos Ghosn said adapting products to the unprecedented pace of innovation has become the top job of every CEO.
At a separate event, investor and former Google executive Kai Fu Lee confirmed what we reported from Guangzhou last December—that China may soon pass the U.S. in developing AI technology. He cited four reasons:
- China is producing armies of engineers eager to go into AI.
- It has a “the hungriest and hardest working” entrepreneurs with ready access to capital.
- It has vast amounts of data and “data is the fuel of AI.”
- It has strong and effective support from the government.
Later today, I’ll be moderating a panel on rising trade tensions that will include Commerce Secretary Wilbur Ross, WTO head Roberto Acevedo, Cargill CEO David MacLennan, Standard Charter CEO Bill Winter, and Eni Chairman Emma Marcegaglia. The session, certain to produce some fireworks, will be webcast on Fortune.com.
More news below.
Huge Qualcomm Fine
The European Commission has hit chip firm Qualcomm with a $1.23 billion antitrust fine for illegally paying Apple billions to make sure that only Qualcomm’s LTE baseband processors were used in iPhones and iPads between 2011 and 2016. The fine represents 4.9% of Qualcomm’s 2017 turnover. The main victim of the secret arrangement was Intel. Fortune
Toys “R” Us Slims Down
Toys “R” Us will shut down around a fifth of its U.S. stores as it tries to claw its way out of bankruptcy. The closure of around 180 stores will begin in early February. The bricks-and-mortar retail chain is, like many others, struggling as online sales gain in popularity. Fortune
White House Sour on Immigration Deal
The White House considers the bipartisan Senate proposal for fixing immigration—a bill that would legalize so-called “Dreamers”—to be “totally unacceptable,” it said Tuesday. “To my friends at the White House, you’ve been all over the board, you haven’t been a reliable partner and the Senate is going to move,” said Senator Lindsey Graham. Wall Street Journal
Senate Approves Powell
The U.S. Senate has confirmed Jerome Powell as the next chair of the Federal Reserve, by a whopping 84 votes to 13. Powell, currently a governor of the central bank, is a lawyer rather than an economist by training, and he will need to figure out how to deal with the Trump administrations deregulatory push. Fortune
Around the Water Cooler
Global Debt Threat
Yesterday’s CEO Daily highlighted current economic optimism, but J.P. Morgan’s international chairman, Jacob Frenkel, has warned business and political leaders not to forget the problem of excessive global debt, which he said was the most pressing concern for the global economy. CNBC
Oil Peak Looms
Global demand for oil may peak in a decade’s time, according to internal Shell studies. The scenario has led the company to shift its strategy so that it doesn’t end up holding too many fossil fuel extraction assets when the world has moved on to renewables. Fortune
Women in Politics
Just under 20% of the House of Representatives are women, and the Senate isn’t much better. That means the U.S. is ranked 99th globally when it comes to female legislators—below Saudi Arabia, let alone other Western countries. At least the U.S. beats Kyrgyzstan. Fortune
Men-Only Fundraiser Exposed
The U.K.’s FT sent an undercover reporter to the President’s Club Charity Dinner, a longstanding, men-only London charitable fundraiser that auctions off things like lunch with foreign secretary Boris Johnson. She reported widespread groping and sexual harassment of the hostesses at the after-party, along with very dubious lots at the auction itself. Financial Times