The pandemic pressed pause on A.I. investment

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Good morning. 

Investment in A.I. paused during the pandemic, as Fortune’s Jonathan Vanian reported last month.

That was a surprise, since so many companies have reported that digital transformation dramatically accelerated. A new report coming out this morning from IBM adds some texture to that trend. The company surveyed several thousand IT decision makers in seven countries and found only 31% said their company “has actively deployed A.I. as part of its business operations.” That was actually down slightly from 34% in a similar October 2019 survey. A larger 41% say they are “exploring, but have not deployed, A.I. in business operations,” up slightly from 39% in 2019.  

Limited A.I. expertise and knowledge remains the top obstacle to A.I. adoption, followed by data complexity and data silos. I asked IBM CEO Arvind Krishna Friday what accounts for the slowdown.  

“When people went through the pandemic, the first thing they invested in was resiliency and making sure people could work remotely,” he told me. 

Shortage of good A.I. talent was also a restrictive factor. Data complexity and data silos “reared their head in a significant way.” But the slowdown may just be a pause before the storm. 

“Almost all companies recognize A.I. is going to improve the customer experience, automation inside the enterprise, and everything around natural language processing. Those are the three areas where we see huge amounts of interest. People were pausing because they were squeezing ten years of digital transformation into two years.” 

But now that that’s done, A.I. looks to be the second wave. “Significant investments are planned,” Krishna says. 

By the way, Krishna is one of dozens of global CEOs who will be joining us next month for the virtual Fortune Global Forum, where we will explore the dramatic changes in business that the pandemic provoked. 

Others who’ve confirmed include: Kevin Johnson of Starbucks, Chuck Robbins of Cisco, Corie Barry of Best Buy, Julie Sweet of Accenture, Kathy Warden of Northrop Grumman, Bom Kim of Coupang, Jane Jie Sun of, Ben van Beurden of Shell, Michael Wirth of Chevron, David Taylor of P&G, Geraldine Matchett of DSM, Michelle Gass of Kohl’s, Warren East of Rolls-Royce, Ana Botín of Santander, Carlos Brito of AB InBev, Changpeng Zhao of Binance, Michael Roman of 3M, Revathi Advaithi of Flex, Kewsong Lee of Carlyle Group, L.A. Mayor Eric Garcetti and National Football League Commissioner Roger Goodell. If you are a CEO and want to attend, shoot me a note or apply here.

More news below.

Alan Murray


Pipeline attack 

A cyberattack over the weekend on the U.S.' largest gasoline and diesel pipeline has now been linked to a criminal gang known as DarkSide, who have demanded a ransom payment from the operator, Colonial Pipeline. The outage is now in its third day, but is not yet hitting gasoline prices. Still, it sets a worrying precedent for the kinds of cyberattacks the oil and gas industry has been quietly plagued by for years. AP

Turning back doses

Several U.S. states are turning back doses of the COVID-19 vaccines from the federal government, as the number of vaccinations per day has dropped below 2 million—the lowest level since March—largely because the people who are most willing to take the vaccine have already taken it. Wisconsin, for one, only requested 8% of the doses set aside for it next week, while uptake is particularly low in the South. New York Times

Saturday Night Live 

Did you watch Saturday Night Live? The crypto crowd did. Dogecoin retreated from its all-time highs after Elon Musk, the show's guest host, called the cryptocurrency a "hustle" in a skit. The coin, which itself started as a joke, had rallied in anticipation of Musk's appearance on the show, which is the sort of thing that happens in 2021. Musk also made the news by claiming he was the first person with Asperger's to host the show (he wasn't.) Fortune

Scottish vote 

Local elections across the U.K. late last week have resulted in another term for Scotland's Nicola Sturgeon, leader of the Scottish National Party. Between the SNP's gains, and those of the Green Party, there is now majority support in Scotland's Parliament for another vote on whether the nation should break away from the U.K. One unsurprising stumbling block: Boris Johnson's ruling Conservative party, which also made gains in the latest election, at the expense of Labour. On the other hand, the pound is not convinced—it's rallying this morning on hopes any referendum will be pushed back. Financial Times 


Amazon's counterfeit bonanza

Was 2020 the year of the scam? Amazon now says it blocked 10 billion—yes, billion—suspected fake or counterfeit listings, up 67% year-on-year. The company has grappled with fakes for years, and now considers it a material threat to its business, but the pandemic's surge of online shopping led to a heydey for phony listings. Fortune

How the chip shortage will end 

The global shortage of semiconductors has hit everything from iPhones to Ford cars—and there's consensus that supply will remain tight through this year, or even longer. But as Fortune's Eammon Barrett writes, the key issue isn't—luckily—a genuine shortage. Fortune

This is your pilot speaking  

When it comes to flying a plane, “It’s not quite like riding a bike,” warns one pilot—you can, alarmingly, get a little rusty. A series of safety errors and terrifying mishaps have been attributed to pilots who are back in the air after a year largely spent on the ground, and suffering from, um, a lack of practice. New York Times 

The boots with buzz

The iconic Dr. Martens shoe brand has been reborn as a buzzy stock, more than seven decades after they were first launched commercially in Germany—to housewives. Fortune's Eric J. Lyman revisits the history of the boots and the brand's thick-soled potential as a post-pandemic star. Fortune

This edition of CEO Daily was edited by Katherine Dunn.

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