By Alan Murray and David Meyer
January 24, 2018

Good morning.

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:

  1. China is producing armies of engineers eager to go into AI.
  2. It has a “the hungriest and hardest working” entrepreneurs with ready access to capital.
  3. It has vast amounts of data and “data is the fuel of AI.”
  4. 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.

Alan Murray
@alansmurray
alan.murray@fortune.com

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