Trade War, Auto Antitrust, Musk Suit: CEO Daily for September 18, 2018

September 18, 2018, 10:05 AM UTC

Good morning.

Is AI really taking off in business? That’s the subject of a new MIT/BCG study. And the answer is “yes”… but only if you are talking about the roughly one-fifth of companies that the study characterizes as “pioneers”—or early adopters.

You can read the full study here. But two big takeaways:

First, the “pioneers” are more likely to use AI to create new revenue opportunities, rather than simply cut costs. That’s a welcome change from earlier waves of technology, which tended to focus on job-destroying efficiency. (A companion study found Chinese companies are doing the opposite–using AI more for cost cutting than revenue creation.)

Second, the “pioneers” are rapidly accelerating their applications of AI, moving from focused tests to enterprise-wide applications. Those who aren’t in the pioneer group are moving much more slowly. “There is a feedback effect,” says BCG’s Martin Reeves, one of the authors. “The more you know, the more you can do.” In short, the gap between the AI “haves” and “have-nots” is growing.

Reeves says the commitment of senior leadership—especially the CEO—helps explain both trends. “The majority of companies are just dabbling,” he told me. But leaders of the pioneers know that AI is “not something you delegate to the IT department…You have to be willing to reinvent your business.”

More news below.

Top News

Trade War

China has promised a "synchronized" retaliation against the U.S.'s imposition of fresh tariffs on $200 billion worth of Chinese imports—a round that will take effect Monday at a rate of 10%, rising to 25% at the start of next year. China has previously said it would respond to the round with tariffs on $60 billion worth of American imports. The U.S. still has another $267 billion round up its sleeve. So what more can China do to hit back? The answers should manifest soon. Fortune

Auto Antitrust

The German car giants Volkswagen, Daimler and BMW are facing a new problem relating to emissions: an EU antitrust probe into suspected collusion that may have slowed down the rollout of technologies for making cars less damaging to the environment. EU competition commissioner Margrethe Vestager: "If proven, this collusion may have denied consumers the opportunity to buy less polluting cars, despite the technology being available to the manufacturers." Bloomberg

Musk Suit

Vernon Unsworth, the British spelunker accused by Elon Musk of being a "pedo," has finally sued the Tesla CEO for defamation. Unsworth aided the rescuers of young soccer players from a Thai cave, and denounced Musk's attempt to help the mission with a mini-submarine. Musk struck back with his evidence-free accusation, which he has repeated since. Unsworth wants at least $75,000 in damages, plus a court order blocking Musk from repeating the claim yet again. Guardian

SpaceX Passenger

Meanwhile, Musk's SpaceX has announced that its first paying passenger, for a trip round the moon and back, will be the Japanese billionaire Yusaku Maezawa. The trip will take place in 2023 and the price tag is a secret. Maezawa made his money by importing records and selling clothing. Last year he shelled out $110.5 million for a Basquiat, setting a new auction record for a U.S. painting. Wall Street Journal

Around the Water Cooler

Kavanaugh Accuser

The Senate Judiciary Committee will next week take testimony from both Brett Kavanaugh, the Supreme Court pick, and Christine Ford, the psychologist who claims he sexually assaulted her over three decades ago. Kavanaugh rejects the accusation, which jeopardizes his place on the Supreme Court bench. BBC

Renault and Google

Renault-Nissan-Mitsubishi has signed a deal with Google that will see Android-based infotainment systems installed across millions of the group's cars, as of 2021. The deal involves Google's maps, voice assistant and app store, and it's a big boost for Google's in-car ambitions. TechCrunch

Weed Decriminalization

The latest move towards the acceptance of marijuana use comes from South Africa, where the constitutional court this morning upheld a ruling that decriminalized it for personal cultivation and use. It's over to the country's parliament to change the law now, and it has two years in which to do so. AFP

Trump Texts

The Federal Emergency Management Agency has postponed its test of a new system whereby President Trump could push text messages to the phones of tens of millions of Americans. The "presidential alert" system is less of a priority than dealing with the damage caused by storm Florence. While it was originally scheduled for Thursday, it will now take place on October 3. Fortune

This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.

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