Good morning.
If day one of Brainstorm AI was about starting small and proving concepts, day two was about going big and achieving scale. Accenture CEO Julie Sweet started the morning session by saying that those companies making a “strategic choice” to lead in machine learning and A.I. are seeing superior results—with 5X the revenue growth of those that aren’t. (She elaborated in this piece for Fortune.)
Some excerpts/outtakes:
“Cloud is the enabler, data is the driver, and A.I. is the differentiator.”
—Julie Sweet, CEO, Accenture
“Machine learning isn’t a product. What you have is business problems that need solutions.”
—Sunil Dhaliwal, general partner, Amplify Partners
“I would have spent less time on the technology. Less time worry about whether I had the perfect technology and perfect algorithm. And I would spend more time getting consensus from my business partners.”
—Jeff McMillan, chief analytics and data officer, Morgan Stanley
“The discussion has shifted from ‘is it real?’ to ‘how do we scale?’”
—Karl Iagnemma, CEO, driverless vehicle company Motional
“We are applying deep learning to pet waste. It’s super important. If you imagine millions of robots that need to be able to detect it, understand what’s in front of them, and avoid it… We put a lot of energy into that.”
—Chris Jones, CTO, iRobot, maker of the Roomba
“One of the big advantages that China has is massive amounts of data. But if we can use, for instance, privacy enhancing technologies, we will be better able to compete in areas where our competitors don’t have any guard rails.”
—Lynne Parker, director, National Artificial Intelligence Initiative
Separately, for our Leadership Next podcast this week, Ellen McGirt and I interviewed Adrian Gore, founder and CEO of South Africa-based Discovery Group, which has pioneered health insurance policies that provide incentives for healthy behavior. He told a fascinating version of his company’s origin story:
“We started out in 1992, right at the time Nelson Mandela was coming out of prison. We had too few doctors, and massive levels of disease. And the government, I think rightly, had an obsession with no discrimination of any kind, no pre-existing conditions. It became clear to us the only real way to have a sustainable insurance model was to make people healthier.”
Imagine that. If only all insurance companies had discovered the same long ago. You can listen to the entire podcast on Apple or Spotify. By the way, Discovery was on Fortune’s very first Change the World list in 2015.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Leadership report
Fortune's writers have put together a major report into how leadership is changing. Here's Phil Wahba on how chief supply chain officers have the toughest job in the C-suite, Sheryl Estrada on the expanding role of CFOs, Maria Aspan on how Instacart CEO Fidji Simo found her groove, Chris Taylor on empathy, Nicole Gull McElroy on rage, and Jane Thier on how Abraham Maslow's "hierarchy of needs" could stem the so-called Great Resignation.
Google defeat
Google has lost its appeal against a $2.7 billion antitrust fine that it received in the EU in 2017. It may not be a gamechanging amount of cash for the company, but the now-emboldened European Commission could force it to change how it treats rivals in the comparison-shopping space, and Google may find itself facing even more EU antitrust suits in the near future. Fortune
Coinbase results
Coinbase's Q3 revenue fell well short of analyst expectations—$1.24 billion rather than $1.57 billion (and as a reminder, Q2 revenue was $2 billion.) The U.S.'s largest crypto exchange blamed "softer crypto market conditions, driven by low volatility and declining crypto asset prices," though it also noted "higher levels of activity among retail traders" in October, when the Shiba Inu coin exploded. Fortune
PayPal results
PayPal's Q3 results also disappointed analysts, with revenue of $6.18 billion rather than $6.23 billion. It's still a 13% year-on-year increase, but what really turned off Wall Street was PayPal lowering its Q4 guidance. As a result, its stock fell by 10%. Fortune
AROUND THE WATER COOLER
Corporate crime
"Some of the largest corporations" in the U.S. will be hit by Justice Department actions in the coming weeks, a senior official working on the crackdown has promised. John Carlin said there would be consequences for firms that have violated deferred prosecution agreements, as well as those that haven't made the compliance investments they're supposed to. Financial Times
Booster mandate
The French government is telling people aged 65 and older to get a booster of their COVID-19 vaccine (as long as it's six months after their initial doses) or face being barred from restaurants, cinemas, concerts and so on. President Emmanuel Macron also said those aged 50 and over would be able to get their boosters from the start of next month. Politico
Chinese economy
China is heading for a housing meltdown that's worse than the U.S.'s 2008 disaster, according to RZA—not the Wu-Tang Clan rapper, but Robert Z. Aliber, retired professor at the University of Chicago’s Booth School of Business. As Aliber told fellow economists and former students: "China’s economy is hitting a great wall" and the Evergrande failure marks a key bellwether. "The property developers that had expanded most rapidly would be the first to fall when prices stopped increasing," he said. Fortune
Rivian shares
Rivian just had the year's biggest IPO, pricing its shares at $78 each and raising around $11.9 billion. It's the sixth-largest flotation ever on a U.S. exchange, and it comes just a couple months after the would-be Tesla rival delivered its first electric vehicles, mostly to its own employees. Fortune
This edition of CEO Daily was edited by David Meyer.
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