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CEO Daily: Tuesday, January 19

If the Internet was the right investment in 1995, and social media was the place to put your money in 2005, then artificial intelligence is the place for companies and investors to bet today, venture capitalist and early Facebook investor Jim Breyer told attendees at the DLD conference in Munich Monday. “The next decade will not provide better returns in any field,” he said.

 

Breyer isn’t talking so much about the science fiction version of AI, where machines replace humans, but rather what’s known as “human assisted intelligence” – where smart computers crunch data to assist human decision-making — the way, for instance, the Waze app helps me plot my morning commute. Breyer told how another company he has invested in – movie-maker Legendary – used big data analysis of social media to refine its trailers for the movie Interstellar and maximize their marketing impact. He sees similar applications in finance, health and many other areas.

 

The important point here is that this technology is not replacing human decision making, but rather informing and improving it. In another DLD interview, Netflix CEO Reed Hastings was asked whether he chose programs for his service using algorithms or gut decisions. He rejected the question as a false choice. “We start with the data,” he said, “but the final call is always gut.” He called it “informed intuition.”

 

I’m in Munich, like many others here, as a stopover on the way to Davos, where the World Economic Forum’s annual meeting begins later today. Its focus: the “Fourth Industrial Revolution.” I’ll be reporting from there all week; stay tuned.

 

More news below.

 

Alan Murray
@alansmurray
alan.murray@fortune.com

Top News

Trump makes bold Apple promise

Republican presidential frontrunner Donald Trump vowed to stop Apple from using China’s supply chain for its manufacturing needs and would get the company to start “building their damn computers and things in this country instead of other countries.” Trump, who boasted that claim at the end of a speech at Liberty University in Virginia on Monday, has regularly attacked U.S. companies for making their products elsewhere. He didn’t get into specifics about how he could force a U.S. firm to change its global manufacturing process. Fortune

China’s growth hits slowest pace in 25 years

China’s economy grew 6.9% for 2015 – the slowest growth the nation has occurred since 1990 but generally hitting Beijing’s official target of “about 7%” for the full year. As Fortune notes, many outsider observers doubt the official figures reported by the Chinese government. One observer said fourth-quarter growth was closer to 4.5%, for example, far off the 6.8% official figure. Global stock markets still rose in reaction, apparently in relief that the figures weren’t worse.   Fortune

Twitter hit by global outage

Twitter was stung by a major outage that left the social-media site down for some users across Europe and Asia on Tuesday. The Guardian has reported Twitter’s network was both “over capacity” and registering an “internal error.” Some users were able to regain access to the company’s network within an hour, however, some Twitter-related interfaces remained down over an hour and a half after the initial network failure. Fortune

Adidas names a new CEO

The German sportswear maker has named a veteran of Oracle and Hewlett-Packard to replace its long-serving CEO Herbert Hainer, who will step down in September. Adidas said Kasper Rorsted, currently CEO of German consumer products maker Henkel, will join the company in August. Shares of Adidas jumped on the news, as some had hoped an outsider would bring in a new perspective and maybe sell some non-core assets. Adidas finds itself trailing market leader Nike and facing stiffer competition from Under Armour in the key U.S. market. Fortune

J.C. Penney poaches Home Depot exec

J.C. Penney over the weekend named a former Home Depot executive to serve as head of stores at the department-store operator. Joe McFarland, who spent more than 20 years at Home Depot, will serve as executive vice president of stores. He is reuniting with Marvin Ellison, who joined Penney as chief executive last year–after also leaving the home-improvement retailer. Penney has seen major shuffles in its executive ranks in recent months, as it aims to turn itself around after a string of losses in recent years. Wall Street Journal (subscription required)

Around the Water Cooler

SpaceX rocket booster has “hard landing”

SpaceX, the space transportation company founded by Elon Musk, said its Falcon 9 booster had a “hard landing” and broke a landing leg on a drop ship in the ocean after lofting a satellite into orbit. Musk admitted via a tweet that it was “definitely harder to land on a ship” – the company has had success in the past landing a reusable booster on land. Booster rockets typically are used once and the goal of SpaceX and other rivals is to find a way to make them reusable to drastically cut the cost of access to space. Bloomberg

Tech giants back Samsung in Apple fight

A trade group of several big tech firms including Google and Microsoft have called on the Supreme Court to reconsider an Apple patent decision, asking the high court to review an appeals court’s decision to award $399 million to Apple over the infringement of an iPhone design. The design dispute is part of a long-running patent fight between Apple and Samsung that first began in 2011. The Supreme Court will decide whether to hear Samsung’s appeal in the next several weeks. Fortune