Two days ago, we published the 70^th annual edition of our Fortune 500 list of America’s biggest companies (ranked by revenue). As my colleagues Alyson Shontell and Lydia Belanger pointed out, the business impact of generative AI is threaded throughout this year’s list—from the blistering-fast rise of chipmaker Nvidia (which rose 87 places in our rankings as its revenue doubled) to the gargantuan market valuation of Microsoft, whose own already strong prospects have been lifted by its entwinement with OpenAI.

It’s no surprise, then, that AI is a prime preoccupation of top companies’ chief executives, as shown by our annual survey of Fortune 500 CEOs, live this morning. (Alan Murray, who recently completed his successful decade-long run as our CEO, designed and conducted the survey for us as he wrapped up his tenure in late April.)

As a group, these leaders are relatively sanguine about what commentators describe as the most disruptive technology of our era. Their responses reflect neither the “bow before the great and powerful Oz” fanaticism of AI’s biggest champions nor the gloomy “there goes my livelihood” alarmism of, say, me. (One might say that neither fanatics nor alarmists make for great CEO material, but that’s a conversation for another day.)

Only 22% of our CEO respondents, for example, identified “technology transformation” as one of the top threats to their business over the coming 12 months. They were also relatively modest in describing their goals for AI. When we asked where their companies were finding the most productive uses for generative AI, 44% chose “customer service and interaction,” and an identical percentage chose “finance and back office.” (Respondents could choose more than one answer.) By contrast, relatively few chose creative-class-threatening options like “coding,” “sales and marketing,” and “R&D.”

You may be thinking, “Wait, aren’t most companies ­already automating customer service and back-office functions?” Ding ding ding, that’s correct! While there’s little doubt that generative AI will inevitably be transformational, business leaders are finding greater value for now, at least, in the incremental.

This is not to say that our CEOs are downplaying AI’s importance. Indeed, some seem to be eager to literally bet on its ascendance: When asked which stocks they’d personally most like to own, their top two choices were Nvidia and Microsoft. For more on their takes on the economy, their stance on work-from-home policies, and their thoughts on the upcoming U.S. elections, see Nick Rapp’s terrific infographic here.

And speaking of Microsoft, our CEOs said that the other CEOs they most admired included Mister Softee’s Satya Nadella and Doug McMillon of Walmart. We’re pleased to say that they’re both profiled in the Fortune 500 issue of Fortune magazine. Read Jeremy Kahn’s portrayal of Nadella here, and Phil Wahba’s catch-up with McMillon here.

Matt Heimer
matt.heimer@fortune.com

TOP NEWS

A Fortune 500 debut

Workday, a software company founded in 2005, makes its Fortune 500 debut this year. The company generated $7.3 billion in revenue in 2023, enough to place it at No. 490 on the list. Carl Eschenbach, who became Workday’s sole CEO earlier this year, suggests to Fortune that the company’s joint package of finance and HR services appeals to corporate clients trying to consolidate vendors. Fortune

A chip company caught between the West and China

Christophe Fouquet, the new CEO of ASML Holdings, is worried that plans to bar the company from servicing its chipmaking machines in China will prevent it from knowing what’s happening in the country. “If we are not there, then we lose control,” he says. ASML is the only producer of the extreme ultraviolet lithography machines that make the most advanced chips. The Wall Street Journal

A deal clears the way for AI antitrust

The U.S. Justice Department and Federal Trade Commission have reached an agreement on how to pursue antitrust investigations into Microsoft, OpenAI, and Nvidia regarding the three companies' dominance of the AI space, sources told the New York Times. One FTC investigation will probe Microsoft's hiring of Inflection AI's cofounder and most of the startup's employees, the Wall Street Journal reports. The AI boom has helped make Microsoft the world's most valuable company; on Wednesday, Nvidia briefly passed Apple in market capitalization. 

AROUND THE WATERCOOLER

Google and Alphabet’s new CFO is Eli Lilly’s Anat Ashkenazi by Sheryl Estrada

The Fed was too focused on the soft landing and has stuck the U.S. economy with higher prices, Stifel chief economist says by Paolo Confino

Elon Musk admits diverting Tesla’s AI chips to his other companies, claiming ‘they would have just sat in a warehouse’ by Christiaan Hetzner

The ‘funflation’ economy is dying as a consumer attitude of ‘hard pass’ takes over and major artists cancel concert tours by Seamus Webster

Wall Street has returned to T+1 trading for the first time in a century. How much longer until T+0? by Niamh Rowe

Microsoft’s chief scientist: Step aside, prompt engineers—AI will start prompting you instead by Jaime Teevan (Commentary)

This edition of CEO Daily was curated by Nicholas Gordon.