Good morning.
Jonathan Vanian, who writes the Fortune newsletter Eye on AI, reported yesterday on a survey from MIT Sloan Management Review and Boston Consulting Group that found most companies are failing in applying artificial intelligence. From Jonathan’s newsletter:
“The survey, based on responses from nearly 2,500 executives, found that seven out of ten companies report little to no impact from their A.I. projects so far. Overall, 40% of the surveyed companies that have make ‘significant investments’ in A.I. have yet to report any business gain.”
But the survey also found a key difference between the relatively few “winners” and the numerous “losers” in this category. The difference: the “winners” were those using technology to upend current business practices. They were the ones willing to, in effect, disrupt themselves.
As we have reported here before, the current wave of business technology is fundamentally different from previous business waves. It isn’t a tool that can be plugged into the organization by the CIO. Rather, it raises the possibility of transforming the entire company, and therefore has to be driven from the top—by the CEO. It has to be done by a team that has the capacity to reimagine their most practiced and beloved methods. And it has to be done in a culture that is willing to embrace radical change. In short, technology is the easy part. Reimagining and reorienting the business is what’s hard.
All of which is a reminder of Amara’s law: technological change is usually overestimated in the short term, and underestimated in the long term. A.I. is clearly following that path.
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Alan Murray
alan.murray@fortune.com
@alansmurray
TOP NEWS
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Moody's chief economist, Mark Zandi, says there's an "uncomfortably high" risk of a global recession within the next year and a half. Zandi: "Even if we don’t have a recession over the next 12-18 months, I think it’s pretty clear that we’re going to have a much weaker economy." CNBC
Thomas Cook
Peter Fankhauser, the erstwhile CEO of Thomas Cook, denies being the one to blame for the travel giant's abrupt collapse. He is sorry it happened, though. A parliamentary committee in the U.K. heard from the Swiss executive that "multiple parties" were responsible. Asked whether he would repay taxpayers for the epic repatriation exercise that was needed to bring home 150,000 holidaymakers, Fankhauser—who took a $955,000 bonus a couple years ago—said he would "consider what is right but I'm not going to decide that today." BBC
Iran Attack
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AROUND THE WATER COOLER
Warren Surge
A whopping 70% of investors believe Elizabeth Warren will clinch the Democratic presidential nomination, according to a survey by banking advisory firm Evercore ISI. Warren's momentum is likely what led her rivals to round on her in yesterday's debate, taking the heat off Joe Biden for a while. Fortune
Carbon Border Tax
The EU is considering adding taxes to other countries' products at its borders, unless those countries meet EU climate standards. Incoming Commission President Ursula von der Leyen says the move is needed to "ensure that EU companies can compete on a level playing field." But, as the Financial Times reports, there's a risk that some may see the move as protectionist. FT
Brexit Bargains
As Brexit talks between the U.K. and EU go down to the wire, Bloomberg has crunched some numbers and reports that the three years since the referendum have seen a notable jump in overseas acquisitions of British tech businesses. There were more than 200 such deals last year alone. Bloomberg
Apple Data
Apple's routing of Safari users' browsing data to Google may be very limited, and clearly intended for anti-fraud measures, but it could still break EU privacy law. And no, not the GDPR—rather, the now long-in-the-tooth ePrivacy Directive, which deals specifically with electronic communications. Fortune
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
