The amazing advances in generative AI in recent months, embodied by tools like ChatGPT and Midjourney, have caused shockwaves that are felt far beyond the tech realm. The far-reaching impact of this technology is forcing companies as a whole to consider how it will affect them and their industry, for better or worse.
Admittedly, large companies are not immune to this revolutionary technology. In fact, in recent weeks, senior executives from a number of blue-chip companies have been discussing the implications of AI at forums ranging from earnings calls to industry conferences.
Here, we take a look at how a small but diverse selection of FTSE 100 companies are tackling breakthroughs in generative AI based on recent public comments by senior executives.
1. BT Group
Speculation about the impact of AI on jobs became more concrete in May when BT announced plans to eliminate 40,000 to 55,000 roles by 2030 in driving automation. As a result, the telecom giant’s workforce could drop by more than 40%.
Most of the downsizing will require less labor-intensive maintenance as the construction of BT’s full-fiber broadband and 5G infrastructure tapers off and the company stops operating dual networks such as 3G and 4G. therefore occurs. But the digitization of operations and the automation of customer service processes will also result in other headcount reductions. This will encourage consumers to turn to web- and app-based tools rather than call centers. BT already uses a support chatbot.
CEO Philip Jansen emphasized the importance of AI in the group’s automation plans at its full-year earnings call on May 18. He said: “We are a large company with about 30 million customers, so we are definitely going to benefit from AI. It helps us be more efficient.”
Jansen also suggested that further advances in generative AI and large language models (LLM) will drive further innovation at the company.
“We have some ideas, but they’re still in the early stages,” he said, adding that their development “must be done very carefully.”
2. WPP
The multinational advertising and PR group acquired London-based AI specialist Satalia in August 2021, making its intentions clear when it named company CEO Daniel Halm as its first chief AI officer. . The move seems particularly prescient given the growing interest in generative AI in recent months.
It may create opportunities for roles in the technology field.May reduce the role of others
At WPP’s first-quarter earnings call in April, CEO Mark Read said the company has long used AI to target audiences and optimize campaigns, mostly in media. said.
“I think what has really changed in the last six months is the application of AI to the production process, such as language and video images,” he said. “That really gave us the opportunity to use it more creatively.”
These include the recent campaign by the Wunderman Thompson agency on behalf of the Democratic Council of Iran, a group of women lawyers and activists of Iranian descent. It used OpenAI’s base model GPT-4 to create a digital book that imagines a brighter future for oppressed women in Iran.
One of the analysts on the conference call justified billing clients for WPP-produced content while increasing the use of AI in creative campaigns would make campaigns more profitable through efficiency savings. He suggested that it may also be possible to reduce the fees that can be reduced. “I don’t think AI will suddenly make people more creative or shorten the process,” Reid said.
3. Pearson
The digital learning specialist company recently revealed that it is perhaps more focused on AI than other FTSE 100 members. This is not surprising given how popular free tools like ChatGPT can threaten your business model.
On May 1, US rival Chegg suspended its full-year outlook after reporting a 5% drop in subscribers, citing the impact of ChatGPT. The next day, Pearson’s stock fell 15%, despite reporting a week earlier that quarterly sales were up 6%, beating its own expectations.
Pearson quickly distanced himself from the Chegg situation, emphasizing that 80% of its profits come from outside the higher education sector. To further reassure investors, the company announced an update to its generative AI strategy on May 9, revealing plans to use technology to power its services.
These plans include adding AI-generated tests and quizzes to the Pearson+ subscription service and using LLM to build predictive algorithms that provide career recommendations.
CEO Andy Byrd said on the conference call that generative AI is not a threat, but a “significant and positive opportunity for Pearson.” But he added that the company has taken legal action to prevent its intellectual property from being used by third parties to train AI models.
“We have made great efforts to protect our intellectual property and will continue to do so in the future,” he said.
4. Unilever
Disruptions in Unilever’s supply chain have been commonplace since the coronavirus crisis. Consumer goods giants are using AI to source alternative ingredients when needed, without impacting the final product. But this is just one of nearly 300 AI use cases across companies, including brands like Ben & Jerry’s, Hellmans and Vaseline.
What has really changed in the last six months is the application of AI to the creative process.
In a recent interview with CIO.com, Alessandro Ventura, Unilever’s CIO and VP of North American Analytics and Business Services, discussed an AI tool called Alex. It manages incoming email and effectively filters out spam and phishing attempts from genuine communications from consumers. It then suggests responses that employees should submit.
He revealed that another AI application, Homer, can use the GPT API to generate online product listings that capture the right tone for each brand.
Last year, the company used AI to develop a limited-edition deodorant, the Lynx AI Body Spray. The technology helped analyze 6,000 ingredients and 3.5 million scent combinations.
The product may look like a marketing gimmick, but Unilever’s knack for finding useful AI applications seems to be paying off. The company reported a 10.5% year-on-year increase in underlying sales in the first quarter of 2023.
5. Compass Group
Even companies that don’t seem to be directly affected by AI at first glance are turning to AI, and for good reason. Take Compass Group, the world’s largest food service provider, for example. The company derives most of its revenue from operating corporate canteens through its Business & Industry (B&I) division.
Covid-19 lockdowns and increased remote work have really hurt Compass Group’s position in the market, as some smaller rivals were forced out of business, according to a May analyst report from Morningstar. said to have been strengthened. But if customer adoption of generative AI reaches a point where it significantly reduces the number of employees who need food in-house, it could seriously harm the company’s business.
When asked at the company’s recent earnings call about the long-term indirect impact of generative AI on its B&I division, CEO Dominic Blakemore said that enough to mitigate the risks. He said his business is diversifying. He added that Compass Group is still figuring out how best to approach AI.
“We are currently in review and dialogue with a number of partners to understand how we can improve our own processes,” Blakemore said. “There may be opportunities for roles in the tech field, which may reduce roles for others.”
