Data Sheet—Charles Schwab’s Surprising AI Adviser

I recently interviewed Walt Bettinger, CEO of financial-services goliath Charles Schwab, and over the course of discussing interest rates, asset allocation, and cash management, I asked him, almost in an obligatory manner, what Schwab was doing with AI.

His answer surprised me. The one-time discount brokerage had no interest in using AI to beat the market, knowing first that algorithms already were quite good at designing asset-allocation strategies and second that a computer couldn’t consistently beat the market. Instead, Schwab was using home-built AI to “listen” to customer-service conversations and offer help to human representatives in real time. A client might have too large a position in one stock, for instance, and an AI could pick this up and alert the rep to alert the client. Only a computer, said Bettinger, could monitor tens of thousands of calls that way and offer constructive suggestions in real time.

The key to this example is that Schwab understands the limitations of AI and also the role humans play in making it work. Read my whole interview with Bettinger, in the current issue of Fortune, here.

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Like a lot of others, apparently, I scratched my head Wednesday morning as to what Apple meant by the $390 million “award” it had given to facial-recognition concern Finisar. The money comes from something Apple calls its $1 billion Advanced Manufacturing Fund, which would suggest that the “award” is either a grant or an investment. It is neither. Instead, it is a commercial agreement.

“Questions have arisen regarding news reports of Apple Inc.’s announcement this morning regarding a $390 million award to Finisar,” the Sunnyvale, Calif., said in a securities filing Wednesday. “Apple has not made a debt or equity investment in Finisar. The amount referred to by Apple represent anticipated future business between the companies over a period of time.”

In other words, Apple is buying a type of laser from Finisar, which will use the commitment to build factories, which will create jobs, which will earn political Brownie points for Apple, which might explain why it is characterizing a purchase order as a “reward” from a “fund.”

NEWSWORTHY

Eat my shorts. Disney's Netflix competitor, coming next year, was already going to be a powerhouse, fueled by classic content from the House of Mouse—not to mention the Pixar, Marvel and Star Wars flicks it owns. Now Disney is buying most of Rupert Murdoch's 21st Century Fox, which produces TV hits like The Simpsons and Modern Family along with a rich movie library, for $52 billion.

Ay caramba. The Federal Communications Commission in a few hours will hold its landmark vote to repeal net neutrality protections. Trump-appointed chairman Ajit Pai along with the telecom and cable industries say the move will encourage investment and innovation. Civil rights and consumer groups along with Internet companies see a potential disaster in the making. Pai's own chief technology officer warned that the rollback will permit web site blocking "not in the public interest." We'll soon know who got it right.

Cowabunga. AT&T reached a tentative deal with some 21,000 workers in its wireless business who have been working without a contract since February. Under the proposed four-year contract, AT&T agreed to send an increased share of its customer support calls to U.S.-based call centers and find new jobs when workers are displaced by center closings.

Don't have a cow, man. Elsewhere in telecom land, T-Mobile said it was happy to have conquered the wireless market and now it would set its sights on the $100 billion pay TV business. Shares of Comcast, the largest cable provider, dropped 2% as news broke that T-Mobile was buying Denver startup Layer3 TV to form the basis of a nationwide service delivered over the Internet and coming next year.

I didn't do it. It's not new trouble, but simply confirmation of old troubles for Uber today. A newly-disclosed letter from the U.S. Attorney in Northern California reveals that the ride service is under criminal investigation, though it does not provide any more details. Uber said it is still reviewing recent claims of wrongdoing and planned to "compete honestly and fairly" in the future.

Woo hoo. Trying to keep pace with Amazon and Walmart, Targetshelled out $550 million to acquire startup Shipt, which helps companies provide rapid delivery on e-commerce orders. “We believe we will be able to leap several years ahead," John Mulligan, Target’s operations chief, said.

I didn't do it, Part II. How did an anti-Trump tweet get posted on CNN anchor Anderson Cooper's account on Wednesday morning? CNN says Cooper's assistant, who has access to his Twitter account, left a phone unlocked at the gym allowing an unknown person to send the disparaging comment.

FOOD FOR THOUGHT

As the holidays approach and (hopefully) the pace of works slows down, it's time to refuel the brain with a good book. This year, Fortune polled readers and staff to come up with a list of a half dozen business-related reads.

But don't just stick to your field. Expand your horizons. New York magazine listed some of the best, and most beautiful, art books out this year. Bustle has "17 Books Every Woman Should Read," though I think plenty of men would benefit from their selections as well. Georgetown professor and Fresh Air book critic Maureen Corrigan has a great and eclectic list for the year's best. And Bill Gates always has a thoughtful selection of his favorites of the year. One of his most unlikely picks? Comedian Eddie Izzard's autobiography:

Believe Me: A Memoir of Love, Death, and Jazz Chickens, by Eddie Izzard. Izzard’s personal story is fascinating: he survived a difficult childhood and worked relentlessly to overcome his lack of natural talent and become an international star. If you’re a huge fan of him like I am, you’ll love this book. His written voice is very similar to his stage voice, and I found myself laughing out loud several times while reading it.

IN CASE YOU MISSED IT

IBM Adds J.P. Morgan Chase, Barclays, Samsung to Quantum Computing ProjectBy Jonathan Vanian

Google Plans Big AI Push in ChinaBy Jonathan Vanian

What Is Ripple and Why Is It Beating Both Bitcoin and Litecoin?By Chris Morris

Amazon Prime Expands to 8,000 Cities for Last-Minute Holiday ShippingBy Don Reisinger

Stranger Things' and 'Glow' Push Netflix to a Bevy of SAG NominationsBy Tom Huddleston Jr.

Commentary: Why Bitcoin Would Make a Great Holiday GiftBy Kathleen Breitman

BEFORE YOU GO