CEOs have a new AI flex

Salesforce CEO Marc Benioff said in a recent interview that AI now does up to 50% of all work at the company, in key functions like engineering, coding, and customer support. In May, Microsoft CEO Satya Nadella said 20% to 30% of the tech giant’s code is now written by AI coding assistants. And in April, Google CEO Sundar Pichai said over 30% of code at Google is now generated by AI.

It’s the latest CEO flex: Citing numbers showing that AI is doing heavy lifting internally. The move presents the company as being ahead of the AI curve and invariably grabs the attention of people who matter. Investors hear the magic words that the business is on track to save money—presumably accomplished—but rarely explicitly stated, through future job cuts. It also signals to clients of the Big Tech companies making the pronouncements that they should open their wallets, pronto, to incorporate more AI into their operations, or risk falling behind.

But how significant these CEO flexes ultimately are from Salesforce, Google, and Microsoft is difficult to know. The metrics cited seem precise, yet when asked, their spokespeople declined to provide any details about how the numbers were calculated or how they defined the work that they claim AI has done.

“The truth is, we don’t yet have a common framework for measuring what ‘percent of work’ really means in the age of AI,” said Malvika Jethmalani, founder of human capital advisory firm Atvis Group, in a message to Fortune. “Are we counting lines of code, tasks completed, hours saved, or business outcomes influenced?” 

But Netherlands-based occupational psychologist Marais Bester thinks something else is afoot. “I think it’s also sort of an indicator to employees, saying, you better watch your back, you better perform.”

From a business psychology standpoint, that’s not an indicator of good leadership, he added.

Shonna Waters, an organizational psychologist and CEO of advisory firm Fractional Insights, thinks the companies that will succeed are those with “structural empathy”—that is, building systems that bring in frontline worker voices. “At the end of the day, you need the humans to still be the ones actually adopting the AI, you need to bring them along with your journey and figure out how to do it in concert with them, as opposed to something you’re doing to them.”

You can read my full story for Fortune here. — Sharon Goldman

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Contact CEO Daily via Diane Brady at diane.brady@fortune.com

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From the analysts

• Goldman Sachs on employment: “We estimate nonfarm payrolls rose by 85k in June, below consensus of 110k and the three-month average of +135k. On the positive side, the end of worker strikes will provide a 6k boost. On the negative side, big data indicators were soft, we estimate the termination of Temporary Protected Status for approximately 350k Venezuelan migrants in mid-May will impose a 25k drag, and we expect a 15k decline in federal government payrolls. We estimate that the unemployment rate edged up to 4.3% on a rounded basis,” per Jan Hatzius et al.

• Pantheon Macroeconomics on job openings: “The JOLTS data shows that the pick-up in openings has been driven almost exclusively by the accommodation and food services sector. Rates of hiring and separations in this sector also have picked up in this sector this year. This higher churn might be due to businesses seeking to reduce their reliance on undocumented immigrant workers,” per Samuel Tombs and Oliver Allen.

   

• Wedbush on AI: “We believe tech stocks will have a very strong second half of the year with the AI Revolution tailwinds now accelerating across semis, software, and the enterprise and consumer landscape. Our bullish view is that investors are still underestimating the tidal wave of growth on the horizon from the $2 trillion of spending over the next 3 years coming from enterprise and government spending around AI technology and use cases. We have barely scratched the surface of this 4th Industrial Revolution now playing out around the world led by the Big Tech stalwarts such as Nvidia, Microsoft, Palantir, Meta, Alphabet, and Amazon,” per Daniel Ives et al.
  
• Wedbush on Tesla: “Tesla announced its 2Q delivery numbers this morning which came in at 384k vehicles roughly in line with the Street’s official 385k vehicle estimate … which was better than feared … If Musk continues to lead and remain in the driver’s seat, we believe Tesla is on a path to an accelerated growth path over the coming years with deliveries expected to ramp in the back-half of 2025 following the Model Y refresh cycle,” per Danile Ives et al.

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CEO Daily is compiled and edited by Nina Ajemian and Jim Edwards.