Mediaboss Marketing

By Therese Poletti

It was called an "iPhone moment" for artificial intelligence, likened to the development of the World Wide Web for the internet, dubbed a Cambrian explosion, equated to the invention of the lightbulb or the printing press.

Whatever the superlatives, there is no doubt that the debut one year ago of a very fast and fluid chatbot called ChatGPT, even with its inaccuracies, has become the most important moment for Silicon Valley since the the debut of Apple Inc.'s (AAPL) iPhone in 2007 - or even the dot-com boom years earlier.

"It might be the most important human invention ever," said Jerry Kaplan, an entrepreneur, author, AI expert and Stanford University adjunct lecturer, at a discussion sponsored by Reinvent Futures this summer. "We have created a tool that can use tools. That is a very fundamental difference, and we have crossed that boundary."

ChatGPT, using a technology called generative AI, and its latest iterations and copycats have upended the hierarchies of nearly every technology sector, including semiconductors, consumer, hardware, software and the cloud, while prompting companies in farther-out sectors, like dining and energy, to tout their AI efforts as well. It also has had a huge effect on Wall Street and the stocks of companies deemed to be winners and losers in AI.

Also read: What is ChatGPT? Well you can ask it yourself.

The technology has also rekindled the startup community, especially in San Francisco, with new ideas and funding, bucking an overall downturn in venture-capital financing, and bringing hopes for future IPOs.

ChatGPT wasn't the first chatbot to go viral. Just six years ago, some of you might remember Microsoft Corp.'s (MSFT) ill-fated Tay, a chatbot that was launched on Twitter and then pulled by the software giant 16 hours later, after it began spewing offensive tweets as responses, as it learned by offensive comments made to it in tweets.

Last year's release of ChatGPT-3, though, revolutionized the AI field by making it accessible to many to use for mundane, or even creative, writing tasks. Ethan Mollick, an associate professor at the Wharton School, wrote in the Harvard Business Review a year ago that ChatGPT was a tipping point for AI, because it crossed a threshold where "it is generally useful for a wide range of tasks, from creating software to generating business ideas to writing a wedding toast."

The business world jumped on its potential and has not looked back since. Companies are experimenting and using AI to eliminate jobs and become more efficient. Morgan Stanley said last month that it believes 44% of the labor force will be affected over the next few years, with an economic impact of $2.1 trillion, eventually soaring to $4.1 trillion.

"Every industry, not just IT, every industry is talking about it or talking about how to integrate into their business," said Haibing Lu, a professor and department chair of information systems and analytics at the Leavey School of Business at Santa Clara University. "AI is on the radar of every business. I even talked to people in the winery biz. They are very traditional...but even those small business think about how AI will impact their business. Everyone realizes the impact of AI."

Companies began looking at bringing AI into their systems, leading to a massive IT investment in both their onsite data centers and in cloud computing systems, in a rush to add the massive computing power needed to run AI. Earlier this year, IDC predicted that spending by companies on AI-centric systems would reach $153 billion this year, with banking and retail leading the way, a jump of almost 27% from 2022. Companies in the thick of it, like chip makers Nvidia Corp. (NVDA), Broadcom Inc. (AVGO) and software giant Microsoft, which invested in OpenAI in 2019, have seen their stocks soar 229%, 70% and 60%, respectively, this year.

Nvidia is the true standout, providing graphics processors designed to run large language models and training applications for AI-focused data centers that its chief executive, Jensen Huang, calls "AI factories." It has seen its revenue double, and then triple in the past two quarters compared with a year ago, as it is swamped with demand for its chips and software.

"Companies are now creating the 'chief AI officer,'" said David Borish, an AI strategist. "I get pinged about that all the time." The role of a chief AI strategist or an AI officer is a new role, he said.

But the rush to embrace the vast improvements in a technology that has been over 50 years in development is fueling fears about how powerful AI is becoming, with debates raging about the march toward so-called artificial general intelligence, the point at which a machine becomes as smart as humans, and the needs for guardrails on its development.

That debate may also have been the crux for Silicon Valley's version of a soap opera at OpenAI, when this month's sudden firing of Chief Executive Sam Altman by the board - and his quick return - captured the attention of techies and civilians alike. Altman was even hired by Microsoft CEO Satya Nadella, only to negotiate a return to OpenAI days later, after nearly all the company's 800 employees threatened to quit and go to Microsoft.

The company also added Bret Taylor, the former co-CEO of Salesforce Inc. (CRM) and Larry Summers, the former Treasury secretary, to its small board of directors, joining Quora CEO Adam D'Angelo. Two other directors stepped down in the brouhaha before Thanksgiving.

A few days after Altman's return, Reuters reported what could have been the reason for his initial ouster. Some staff researchers reportedly wrote to the board, warning of a project called Q* (Q-Star), saying that it was a breakthrough toward artificial general intelligence but that it could also threaten humanity. Reuters reported that the board was concerned about commercializing AI's advances before understanding the consequences.

This has lead to more hand-wringing about whether the machines will eventually take over. But some savvy technologists believe it is time to calm down. Kaplan pointed out over the summer that artificial general intelligence, also called AGI, has a lunatic fringe all riled up and scared.

"They are not coming for us, because there is no 'they,'" he said, adding that he had a perfect answer to that problem: "Let's not do that."

"I think what it is, is the craftsman was bewitched by his craft," said Paul Saffo, a Silicon Valley forecaster and a consulting professor at the School of Engineering at Stanford University. Saffo said that over the long history of AI, researchers have long over-promised and under-delivered. "It is the opposite of biotech. Biotech mumbles and understate their innovations and it turns out to be a big deal. But AI in particular has a long history of wildly overstating what they are doing."

So far, though, the capabilities of generative AI have captured the world. And it's too late to put the genie back in the bottle.

-Therese Poletti

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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One year after its public launch, ChatGPT has succeeded in igniting ... - Morningstar

Page 1 of IHL AI Readiness Profile for Macy's

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New research projects increased sales opportunities, improvements in gross margins, and lower expenses due to AI Readiness

Greg Buzek, President IHL Group

According to the research, Macys could see as much as $3.8 billion in increased sales, $2.1 billion in improved gross margins through lower product costs, more optimized pricing, and supply chain improvements, and then reduce by $1.7 billion sales and generative administrative costs through 2029.

Our research approach was to start by looking at opportunities from an industry-level, then to the segment and specific retailer level leveraging our public and private data, said Greg Buzek, President of IHL Group. We then applied a 9-point algorithm to each company that measured items like data maturity, analytics maturity, alignment with key vendors, as well as free cash flow.

The research includes gains that can be made through traditional AI/ML technologies, Generative AI, and the potential for Artificial General Intelligence. These figures do not include any savings from reducing headcount, rather they focus on creating more efficiency and supporting growth/lower expenses through greater efficiencies only.

These figures do not consider any cost savings resulting from workforce reduction. Instead, it solely emphasizes the creation of greater efficiency to support growth and reduce expenses.

In total, each of the retailer profiles includes the following data:

Total AI Impact from 2022-2029: Combined impact from traditional AI/ML, Generative AI, and Artificial General Intelligence. Annual Impact by Income Statement Category: Gains in sales, gross margins, or lower operating costs. Total AI Readiness Score and Rankings vs Competitors: Shows competitiveness in segment and overall retail market AI Impact by Line of Business: Explore the AI potential in Merchandising/Supply Chain, Sales & Marketing, Commerce, Infrastructure, BI/Analytics, Store Systems, and other areas such as Collaboration, ERP, and Legal. Benefits by Specific Solutions: For instance, under Merchandising/Supply Chain gain insights on benefits gained via Order Management, Assortment and Allocation Planning, Distribution Systems, Warehouse Management, etc.

For a glimpse into the rich data and insights provided by these profiles, you can access the Macys profile here.

The Retail AI Readiness Profiles are available for individual companies or enterprises can access the entire directory of profiles with ongoing access to updated data as systems evolve.

About IHL Group:

IHL Group is a global research and advisory firm headquartered in Franklin, Tennessee, that provides market analysis and business consulting services for retailers and information technology companies that focus on the retail, hospitality, and consumer goods industries. For more information, see http://www.ihlservices.com, call 615-591-2955 or e-mail [emailprotected]. Press inquiries, please use [emailprotected] or the phone number above.

Note: This report is intended for informational purposes and does not constitute financial or investment advice. Please refer to the complete report and methodology for a detailed understanding of the data and analysis.

Gregory Buzek IHL Group +1 615-591-2955 email us here

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Macy's Could See Over $7.5 Billion in Additional Business Gains ... - CMSWire

Artificial intelligence is more than just a buzzword. Its the result of many technologies coming together, starting at the hardware layers.

AI is being used to generate code and protect algorithms while also being used for security in analyzing cloud and code usage, explainedMerritt Baer (pictured), field chief information security officer of Lacework Inc. Regulating the acceleration of artificial general intelligence is a current cultural tension, with some advocating for acceleration and others for slowing it down.

Weve talked about AWS Nitro before and some of the confidential computing benefits that folks get from the fact that AWS built it to not be human accessible, Baer said. So, you dont have to pay extra for that factor. This is part of a longer tale about the chip industry and other things. Its important in that, I think right now, of course, AI is a buzzword, but what were really seeing is the culmination of a lot of technologies coming to bear.

Baer spoke with theCUBE industry analyst John Furrier at the Supercloud 5: The Battle for AI Supremacy event, during an exclusive broadcast on theCUBE, SiliconANGLE Medias livestreaming studio. They discussed how securing the cloud and addressing potential security threats in the new generation of AI is crucial.

Security around AI will be important, with the ability to do more and know more, and the most likely source of an attack being a valid credential being misused, according to Baer.Companies and industries are having a reckoning and need to define the values they want to live by with tech being human-constructed and the potential for underserved communities to gain more accessibility, while also aiming for more, better and faster progress in a deliberate and conscious way.

I think that security around AI and also the security of your AI will be areas that we care about for the foreseeable future. But were going to be doing stuff at an accelerated pace with that high power compute, with the ability to do more and know when youre hitting a wire, Baer said. A proverbial wire, like a threshold. So, being able to get real-time alerting and really low latency alerting around things that look anomalous.

Security should not be seen as a cost center, but as part of the business proposition, Baer explained. Lacework is delivering effective capabilities to help customers take action and improve over time. Improving security team response time, instant response, threat detection and identity monitoring are crucial for CISOs, who often feel isolated in their roles and can benefit from automation.

As a CISO, you want to reduce the likelihood of a bad day. You want to notice when your bad day starts and have it have little to no impact. Then you also want to get that for the ROI that you are aware of for something that you have already bargained for, Baer said. Is it known? Is it an unknown? These are business decisions, and security executives are increasingly realizing that they need to present this in a sense that makes investments relevant.

Heres the complete video interview, part of SiliconANGLEs and theCUBEs coverage of the Supercloud 5: The Battle for AI Supremacy event:

THANK YOU

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Securing the cloud and AI: Insights from Laceworks CISO - SiliconANGLE News

Enlarge / The Amazon Q logo.

Amazon

On Tuesday, Amazon unveiled Amazon Q, an AI chatbot similar to ChatGPT that is tailored for corporate environments. Developed by Amazon Web Services (AWS), Q is designed to assist employees with tasks like summarizing documents, managing internal support tickets, and providing policy guidance, differentiating itself from consumer-focused chatbots. It also serves as a programming assistant.

According to The New York Times, the name "Q" is a play on the word question" and a reference to the character Q in the James Bond novels, who makes helpful tools. (And there's apparently a little bit of Q from Star Trek: The Next Generation thrown in, although hopefully the new bot won't cause mischief on that scale.)

Amazon Q's launch positions it against existing corporate AI tools like Microsoft's Copilot, Google's Duet AI, and ChatGPT Enterprise. Unlike some of its competitors, Amazon Q isn't built on a singular AI large language model (LLM). Instead, it uses a platform called Bedrock, integrating multiple AI systems, including Amazon's Titan and models from Anthropic and Meta.

Amazon

"Developers can use Amazon Q to explain specific programming logic by asking questions (e.g., Provide me with a description of what this application does and how it works)," writes Amazon in a press release. "And Amazon Q will give details like which services the code uses and what different functions do (e.g., This application is building a basic support ticketing system using Python Flask and AWS Lambda), along with a description of the applications core capabilities, how they are implemented, and more."

Notably, Amazon did not reveal performance benchmarks for Q that would allow us to evaluate its capabilities versus chatbot solutions from other providers. As of press time, we have not experimented with Q yet.

Amazon Q promotional video on YouTube.

Following significant investments in AI, including a partnership with AI-startup Anthropic and the development of AI-tuned GPU chips, Amazon has intensified its AI focus. The Q announcement came as part of a series of reveals at Amazon's annual cloud-computing conference, re:Invent 2023, including plans to create yet another new AI chip for its data centers.

Amazon Q is priced at $20 per user per month, which is lower than Microsoft and Google's enterprise AI solutions, which are priced at $30 per user per month. Amazon Q is available now "in preview in AWS Regions US East (N. Virginia) and US West (Oregon)," according to the company.

It's worth noting that the Amazon Q name is apparently unrelated to recent rumors about an OpenAI breakthrough called "Q*" (pronounced "Q-star") that caused premature hype over the development of AGI (artificial general intelligence), with experts calling the claims largely overblown.

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Amazon unleashes Q, an AI assistant for the workplace - Ars Technica

Even if India does not become a formal ally to Western countries, it will continue to position itself as an independent, rising power whose interests are more aligned with the West than with China and its de facto allies (Russia, Iran, North Korea, and Pakistan). Moreover, India is a formal member of the Quadrilateral Security Dialogue (the Quad) with the U.S., Japan, and Australia, the explicit purpose of which is to deter China. Japan and India have longstanding friendly relations and a shared history of adversarial relations with China.

Japan also invited Indonesia, South Korea (with which it is pursuing a diplomatic thaw, driven by common concerns about China), Brazil (another key Global South power), and Ukrainian President Volodymyr Zelensky to the G7. In each case, the message was clear: The Sino-Russian friendship "without limits" is having serious consequences for how other powers perceive China.

In its final communiqu?, the G7 explained at length how it will confront and deter China in the years ahead. It decried Chinese "economic coercion" and expansionism in the East and South China Seas, stressed the importance of an Indo-Pacific partnership, and issued a clear warning to China not to attack or invade Taiwan.

In taking steps to "de-risk" their relationships with China, Western leaders settled on language that is only slightly less aggressive than "de-coupling." But it isn't just the diplomatic argot that has changed. According to the communiqu?, Western containment efforts will be accompanied by large investments in clean energy and infrastructure across the Global South, lest key middle powers be drawn into China's sphere of influence through its Belt and Road Initiative.

Meanwhile, the Western-Chinese tech and economic war continues to escalate. Japan recently imposed restrictions on semiconductor exports to China that are no less draconian than those introduced by the U.S., and the Biden administration has since pressured Taiwan and South Korea to follow suit. In response, China has banned semiconductors made by the U.S.-based chipmaker Micron Technology (MU), and has begun to restrict exports of some critical metals over which it has a near-monopoly in production and refining.

Likewise, U.S. chipmaker Nvidia (NVDA) - which is quickly becoming a corporate superpower, owing to surging demand for its advanced chips to power AI applications - is facing new constraints on selling to China. U.S. policymakers have made clear that they intend to keep China at least a generation behind in the race for AI supremacy. To that end, the U.S. CHIPS and Science Act of 2022 introduced massive incentives to re-shore chip production.

The risk now is that China will leverage its dominant role in producing and refining rare-earth metals that are key inputs in the green transition. China has already increased its exports of electric vehicles by about 700% in value terms since 2017, and it is starting to deploy commercial airliners that eventually could compete with Boeing (BA) and Airbus (FR:AIR). So, while the G7 wants to deter China without escalating the cold war, the response from Beijing suggests that it has failed to thread the needle.

The U.S. and China cold war will mean more fragmentation of the global economy.

Of course, the Chinese would like to forget that their own aggressive policies contributed to the situation. In interviews marking his 100th birthday in May, Henry Kissinger - the architect of America's "opening to China" in 1972 - warned that unless the U.S. and China find a new strategic understanding, they will remain on a collision course that could end in outright war. The deeper the freeze, the greater the risk of a violent crack-up and military hostilities this decade.

Even without an actual hot war between the U.S. and China, a colder war will mean more fragmentation of the global economy, more balkanization of global supply chains, more de-risking or decoupling, and more restrictions on cross-border flows of goods, services, capital, people, data, and knowledge. Neoliberal free trade is out; industrial policies, "homeland economics," subsidies, and secure trade are in, as the world increasingly divides into two economic, monetary, financial, currency, trade, investment, and technological domains.

Climate risks are climbing

At the same time, the costs of climate change will continue to increase rapidly. Scientists now expect global average temperatures to reach 1.5deg Celsius above pre-industrial levels - the Paris climate agreement target - in the next five years. To hold temperature increases there, greenhouse-gas emissions would have to be cut by half by 2030, which is basically impossible. Even if all the commitments made at COP26 in Glasgow and COP27 in Sharm El-Sheikh were to be met - a very big if - temperatures would still be on track to hit 2.4degC above pre-industrial levels by the end of this century.

Humanity's handling of climate change amounts to a slow-motion, but accelerating, train wreck.

In the absence of real action, greenwashing, greenwishing and greenflation have become rampant. The good news is that there are many technological options that can accelerate decarbonization and help us achieve net-zero emissions with limited impact on economic growth: renewable energy, carbon capture and storage, clean and green hydrogen, and nuclear fusion.

The bad news is that fusion is still a long way from commercialization, and many of the other options remain costly compared to fossil fuels. Humanity's handling of climate change amounts to a slow-motion, but accelerating, train wreck.

Making matters worse, poorer emerging markets and developing countries are facing dire economic prospects. After an anemic recovery from the COVID pandemic, they bore the brunt of higher food and energy prices following Russia's invasion of Ukraine. Higher inflation has eroded real incomes, and their currencies have weakened against the U.S. dollar (DX00). This, combined with higher interest rates, has left many nations with unsustainable debts. The International Monetary Fund and the World Bank estimate that about 60% of poor countries and 25% of emerging markets cannot service their debts and will need to restructure them.

Social strife, political instability and AI's rise

Against this backdrop, increased poverty, climate change, inequality, and social strife could easily lead to domestic political instability or even failed states, causing mass migration and fueling the trend toward economic populism. Most of Latin America is now ruled by left-wing populists, while far-right authoritarian populism is on the rise in other parts of the world.

In the U.S., former president Donald Trump is the clear favorite to win the Republican Party's nomination for the 2024 presidential election, and could well retake the White House. In the U.K., the demagogic Boris Johnson remains very popular. A party with fascist roots is running Italy, and the far-right Marine Le Pen remains the de facto opposition leader in France. In Turkey, the recently re-elected President Recep Tayyip Erdogan continues to consolidate autocratic rule. Until the Hamas attack, Israel was governed by the most right-wing coalition in its history. And, of course, Russian President Vladimir Putin and China's Xi have formed a new authoritarian axis.

Finally, in the year since Megathreats appeared, AI has become an even bigger topic, owing to the public release of generative AI platforms like ChatGPT. I had originally predicted that deep-learning architectures ("transformer networks") would revolutionize AI, and that does seem to be what has happened. The potential benefits - and pitfalls - of generative AI are profound, and they are becoming increasingly clear. On the positive side, productivity growth could be sharply increased, vastly enlarging the economic pie; but, as was true of the first digital revolution and the creation of the internet and its applications, it will take time for such gains to emerge and achieve scale.

The risks associated with AI are also becoming clear. Many worry about permanent technological unemployment, not just among low-skilled blue-collar workers, but also across creative professions. In an extreme scenario, the economy two decades from now could be growing at a rate of 10% per year, but with unemployment at 80%. A related risk, then, is that AI will be another winner-takes-all industry that turbocharges income and wealth inequality.

AI also will have a similar effect on disinformation, including through "deep fake" videos, and various forms of cyber-warfare, especially around elections. And, of course, there is the small but terrible risk that advances in AI will lead to AGI (artificial general intelligence) and the obsolescence of the human species.

The debate over whether tech firms should be regulated more strictly, or even broken up, continues to intensify. But the obvious counter-argument is that America needs Big Tech and AI firms to assure its dominance over China, which is doing everything it can to become a military superpower.

Fortunately, if AI does usher in a world of 10% annual growth, a UBI or substantially more income redistribution could well be possible. Moreover, AI also could help us address other megathreats such as climate change and future pandemics. While none of these positive outcomes can be taken for granted, given the power and influence that elites wield, problems of distribution are always easier to tackle in a high-growth setting than in a low-growth one.

While stagflationary forces will weigh on growth and exacerbate megathreats in the medium term, the future could be bright if we can avert a dystopian scenario in which megathreats destructively feed on each other. Our first priority will be to survive the next few decades of instability and chaos.

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You're not imagining things: The end of the -3- - Morningstar