Good morning.
Recently, CFOs have been warming up to finding use cases for forms of generative AI like ChatGPT. Some financial services firms are all in. For example, Morgan Stanley has officially given financial advisors a generative AI assistant. But this acceptance is relatively new.
“I think the big reaction when we released this technology earlier this year was to pull back and to say, ‘You know, we’re not sure about what the technology can do,’” says Janine Korovesis, VP of finance at OpenAI, the San Francisco-based tech company that launched ChatGPT.
I met Korovesis at Workday Rising last week in San Francisco, and we recently sat down for a conversation. She argues generative AI should be looked at as a tool to assist in performance. “Having a calculator doesn’t make me a bad finance professional,” Korovesis gave as an example. “I think that it’s important to be exploring ways to integrate the technology instead of stepping back from it,” she says.
“I think the value of generative AI, everywhere, including finance, is basically unbounded,” Korovesis tells me. “This is the first technology that I’ve seen that has the ability to have applications across the board. The reason why is because it’s such a general-purpose technology.”
With ChatGPT, for example, OpenAI focuses on building large language models that have general applicability. “It’s not brand new,” Korovesis says. “We’ve been selling access to it through our API since 2020. But the great part about it now is the ‘Chat’ part has changed the way everyone interfaces with the technology. It’s much more conversational. It’s accessible to finance professionals now who may not have previously had quite the level of expertise to engage with it.”
Both inside OpenAI on Korovesis’ team, and in the market, more applications in the finance realm are starting to show up, she says.
Experimenting with ChatGPT
Does Korovesis have advice on how to explore the technology in the finance function? “Hire great people that are excited about generative AI,” she says. “My controller is a great example of this. She has an incredible propensity to figure out how to integrate ChatGPT in my team’s daily work.”
And Korovesis is sharing some of the best practices. “I gave a presentation earlier this year at the EY tax executives event, and we were able to show companies how you can leverage ChatGPT to process large Excel files. As unsexy as it sounds, it’s an integral part of every finance team’s responsibilities.”
The OpenAI finance team uses ChatGPT for tax analysis as they need to look at the company’s sales by country and determine how much tax they must remit. In Excel, that results in a very large transactional file with millions of rows, she says.
“It’s a little sci-fi, but we ask ChatGPT how we can process that file,” Korovesis says. “And it responds with code that we can run on our machine to process it, all at once, in a programmatic way.” But you don’t have to be an expert, she says. “ChapGPT can tell you how to run the code without knowing how to code in general. It will take you every step through the process.”
Taking out the white board
Korovesis joined OpenAI as controller in 2018 and was promoted to VP of finance in February 2022. Before joining the company, she worked in accounting leadership roles at Google. Korovesis tells me she has a philosophy of “demystifying everything”—“I think it’s my superpower.”
So, what does that entail? Breaking down a problem to its simplest parts to get the right people involved in solving it, Korovesis says. She gives an example. “We have been building a commercial business this year, as you may have noticed, and we’ve been building things really fast,” Korovesis explains. “And we’ve been introducing new software in terms of how our customers get signed up.”
She noticed that the team’s approach to adding software providers to the technology stack was disjointed. “I brought everyone into a room and I said, ‘Guys, what are we trying to do here?’” Korovesis says. One team wanted to have a Know Your Customer (KYC) software solution and the other team wanted to collect data to prevent fraud, she says.
But it was an old fashioned tool that helped her team solve the problem: They sketched out the problem, knowns and unknowns on a regular old whiteboard.
“If I had the ability to carry a whiteboard around with me everywhere, I would. If you can’t explain something simply to a person, you probably don’t understand it yourself.”
Does she see the CFO role in her future? Perhaps.
“I have always chased challenges in my career, and I’ve never chased titles,” Korovesis says. “The position of CFO at any company is an incredible achievement. But the thing that I have always focused on, and it has served me well, is really just finding something that is hard work, and that has meaning.”
Have a good weekend.
Sheryl Estrada
sheryl.estrada@fortune.com
*An upcoming event: Fortune’s CFO Collaborative is an invitation-only group of CFOs from leading companies, which meets virtually and in person for deep-dive discussions on what is top of mind for finance leaders. Next month, our conversation will focus on, “What will the CFO role look like in 2024?” In this intimate dinner discussion scheduled for November 9 in Boston, Mass., hosted in partnership with Workday and Deloitte, we will explore the evolving role and scope of the CFO. We will be joined by Alan Murray, CEO at Fortune, and Andrew McAfee, co-director of the MIT Initiative on the Digital Economy, and a principal research scientist at the MIT Sloan School of Management.
It’s an invite-only event, but CFOs can apply to attend here. If you’d like more information, please send an email to: CFOCollaborative@Fortune.com
Leaderboard
Some notable moves this week:
Joel Grade was named EVP and CFO at Baxter International Inc. (NYSE:BAX), a global med-tech company, effective on Oct. 18. Brian Stevens, who has served as the company's interim CFO, will transition to his prior role as SVP, chief accounting officer and controller. Grade joins Baxter following a 25-year career with Sysco. He most recently served as Sysco's EVP of corporate development.
Charles E. Zebula was promoted to EVP and CFO at American Electric Power (Nasdaq: AEP), effective immediately. Zebula previously served as AEP's executive vice president of portfolio optimization. He succeeds Ann P. Kelly, who is departing the company. Previously, Zebula served as EVP of energy supply, SVP of investor relations and treasurer, and numerous other positions at AEP and its subsidiaries.
Wayde McMillan has stepped down from his role as EVP, CFO and treasurer at Insulet Corporation (Nasdaq: PODD) an insulin pump technology company, effective Oct. 20. McMillan will join 3M as CFO of its health care business, which 3M has announced it plans to spin off into an independent company. Lauren Budden, group VP and chief accounting officer and controller, will become interim CFO and treasurer until a permanent successor is appointed.
Audra Foglietta was named CFO at Pie Insurance, which specializes in commercial insurance for small businesses. Foglietta spent more than 20 years at Chubb, most recently as EVP and CFO of global operations and technology. She also previously served as CFO of Westchester Specialty.
Todd Wahlund was promoted to VP and CFO at Otter Tail Corporation (Nasdaq: OTTR), effective Jan. 1, 2024. Wahlund will succeed Kevin Moug who will retire on Dec. 31. Wahlund has served as the CFO and VP of finance at Otter Tail Power Company, the corporation’s electric utility. Before that, Wahlund served as the VP of financial planning and treasurer at the corporation, and as VP of finance and planning for the Varistar Manufacturing Platform.
Matt Plavan was named CFO at Origin Materials, Inc. (Nasdaq: ORGN, ORGNW), a carbon-negative materials company, effective Oct. 30. Plavan succeeds Pam Haley, who has served as interim CFO since Sept. 1. Haley will continue in her role as SVP of accounting and finance. Before joining Origin, Plavan served as CEO at IngredientWerks.
Big deal
An S&P Global Market Intelligence analysis finds that the interest of short sellers continues to thrive in the consumer discretionary sector, as sellers still believe that persistently high inflation will impede consumer demand. Short interest in the consumer discretionary sector was 5.41% in mid-September, up from 4.98% in mid-August.
Short sellers are also increasing their bets that the economic headwinds facing the real estate industry are far from over. In the real estate sector, short interest was at 3.35% as of mid-September, up 8 basis points since mid-July and the highest level of short interest in the sector since mid-June, according to the report.
Going deeper
Here are a few Fortune weekend reads:
>"London Stock Exchange CEO says the U.K. has itself to blame for not attracting senior talent due to lower pay: ‘We’ve hamstrung ourselves’" by Prarthana Prakash
"Waking up before your alarm? Falling back to sleep can make you more exhausted—here’s the cut off time when you should just stay awake" by Erin Prater
Overheard
"If you look at demographic trends, labor shortages are not going away. It’s getting better but that’s a structural change in the labor market because of the aging of the U.S. population, so what that means is inflation is always going to be a risk, it’s going to prop up, and so going back to zero or near rock bottom interest rates is going to be difficult to support the economy.”
—Nela Richardson, chief economist at payroll processing firm ADP, told CNBC in an interview.
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