00:00 Speaker A
I’ve been looking at non-tech companies that I’ve reported on. Are you getting a return on your investment? And JPMorgan, you wrote about this on Business Insider. Jamie Dimon from JP Morgan came out and said, “You know what?
00:15 Speaker A
AI has led to 30-40% headcount reductions in some departments at banks. But it will flow to consumers, he said. You don’t necessarily want to save a lot of money, but you might be able to get more money at some point. But if you’re not, I don’t feel like you’re at that point yet.
00:36 Speaker B
Yes, and he also said that many of these layoffs are not necessarily outright layoffs, but reassignment of employees within the company. So I think there’s a lot more to come and we’re still in the experimental phase. They still achieve productivity gains. I believe and believe that B ofA’s CFO mentioned this. I think what’s really interesting is the price of the token and how that starts to affect things. This concept started with token maximization, and now comes the idea of model maximization. Where do you want to spend your money?
01:10 Speaker B
What should we do with ultra-luxury models, where should low-priced models go, and how should we change those areas? But agreed. II, what I hear all the time from people in tech and from Dan is that when you see people completely cutting headcount because of AI, it’s not necessarily because they’re increasing productivity, it’s because they need to subsidize their investment in AI to save money. The people who are actually making the most money are hiring because “we’re doing more business, we’re more efficient.” That’s my opinion at least.
01:34 Speaker C
This is one argument against the idea that AI will eliminate everyone’s jobs. Well, no, if you become more efficient and hire more people, you will run a more productive business and bring in more revenue, no matter what happens to your business. But I think this is interesting. Because we’ve also seen some companies prematurely cut staff by saying, “AI will be able to handle this.” Then he comes back with his tail between his legs and actually says, Could you please come back? Because we’ve gone far beyond what we thought AI could do.
02:11 Speaker C
And I think it’s still in a very experimental stage. So we’re still talking about whether AI will take people’s jobs away. And, sure, we’re seeing some layoffs, but as a result, some new jobs are emerging. Um, but I think even though we’ve been talking about this for four years, we’re still in the very early stages of deploying this kind of major technology. And I think everyone wants answers right now.
02:40 Speaker C
And certainly, if my job was at stake, I would want to know yesterday if I had to do anything to improve my chances of not being fired. However, III believes that it is still too early and decision makers do not even know what decisions to make.
02:49 Speaker A
And the other thing I would say is, there’s kind of a hype around this being a transformative technology. If you look at what companies are actually saying, at least right now, especially in non-tech companies, it seems like it’s just garden variety in terms of operational efficiency, right? It’s a little bit like what Jamie Diamond is talking about.
03:14 Speaker A
I spoke with the president of Aetna yesterday, and they’ve done this survey that talks about the relationship between health care providers and insurers, and sentiment has improved a little bit, and they attribute some of that to digital tools. But it’s like getting pre-approval in a more efficient way. If you look at United Healthcare, I think they just got off a conference call, and they’re talking about AI, and AI is helping us respond quickly. We use this information to improve our services.
03:46 Speaker A
Enhance interactions, reduce administrative burden, and support better service and decision-making. So what they’re using for their provider is a listening function. But that doesn’t seem transformative to me. It sounds like everyone would prefer slicing any proportions to be more efficient.
04:09 Speaker B
This is where the discussion of ROI comes into play. Because if your company is becoming that much more efficient, are you really making a profit if you’re paying that much more in tokens?
04:18 Speaker A
Yeah.
04:18 Speaker C
In other words, we need to take what AI companies and hyperscalers say with a grain of salt. Because the more they can hype what they’re selling, the more people buy into it, so I mean the whole idea that the world is going to end because of AI, that’s a good way to sell, well, if it’s that strong, maybe I should invest in it. I think Julia is right, but where is it?
04:47 Speaker C
It’s going to improve the way people work in general, right? And the way I talked about it is pretty much the internet, right? Perhaps the Internet has been fundamentally transformative, right? I mean, we’re on the Internet now. You can order a car from anywhere in the world. So a whole economy started as a result of that.
05:13 Speaker C
Will AI do that? I don’t know. So maybe it makes our lives just a little bit easier in certain fields, and it could be transformative in other fields, like life sciences, along those lines. What’s really important is not about filing spreadsheets, it’s about, you know, big brains. It’s like curing cancer. Something like that. I think it’s kind of two-sided.
05:39 Speaker C
And I think for the average person, it only improves on the average rigamarole of the day. And that seems to be what we’re seeing.
05:51 Speaker A
It’s not for nothing, but is it worth it? That’s the question.
05:54 Speaker B
you’re right. And I also think there’s a big caveat in all of these conversations that AI is a great scapegoat. If I were a business owner, would I have to admit that I made a huge mistake, made bad strategic decisions and overhired in certain areas post-Covid? It was probably when hiring was crazy and interest rates were zero. Or, folks, we’re getting incredible benefits from AI. It needs to be streamlined and it needs to be flat. That’s why you need to cut it. This is actually much easier than saying, “Maybe I’m not as good an executive as I thought.”
06:27 Speaker A
Yeah. Yeah. This is what I think it means for companies like XA X technology companies. I think we’ll start to get into hyperscalar earnings, just like there was a whole discussion about free cash flow for these companies. So, in your opinion, we’ll see if people actually pay attention when they report, or if there’s like a lull after earnings, all that talk starts to pick up steam again.
06:56 Speaker C
Well, it’s funny if that’s the case, because meta, Microsoft, as soon as they start talking about spending more, the stock price goes down, right? I think it’s meta
07:07 Speaker A
It depends on which company. At first, everyone announced their spending plans and everything was going well.
07:11 Speaker C
that’s right. Everyone won, everything went up, then it was announced again and everything was ruined. And now it’s kind of a hodgepodge where Google spends more money. Yes, they’re cool, because you can see why it’s going where it’s going. Microsoft. Well, we have a co-pilot, but we’re getting various reports that people may or may not like it. Meta, I don’t know about that, but you’re taking weird videos of dogs walking on their hind legs, with six shooters or something. That’s weird. I think it’s a meta thing,
07:44 Speaker C
There are two choices: whether it is there or not. Microsoft has to talk about increasing the co-pilot seat. I think that’s a big deal. Well, I think their capacity limit issue has been an issue for far too long. They have to give some indication of when and what the end of the tunnel will look like. On a meta note, the important thing is whether Mark Zuckerberg will announce a cloud business. And I think that’s going to be a big thing for them.
08:18 Speaker C
I mean, are they going to do it as a full-fledged competitor to Amazon, Microsoft, and Google? Will it become a neo-cloud? Are they going to go the route that SpaceX is going to go, which is, now that they’ve got some extra stuff, are they going to buy it, almost like a yard sale, right? Like where we’re doing it. So I think that’s going to be a huge thing for the meta. Google, keep doing what you’re doing. And so is Amazon. I mean, that would be interesting, though.
08:52 Speaker A
Did you see that Open AI released new goodies today?
08:54 Speaker B
oh yeah. Yeah.
08:55 Speaker A
See this?
08:56 Speaker B
I didn’t.
08:57 Speaker A
So, remember one of my favorites, the Palenteer chore coat? Apparently it sold out quickly. So Open AI now has goodies. There’s something like a quarter zip that says research on it. There are Open AI socks that look like the logo. Good research takes time, who will buy this, who will buy this?
09:24 Speaker B
Who will buy it? Who would buy something like this?
09:25 Speaker C
People, I mean, let’s be honest, true believers. But it’s also similar
09:29 Speaker A
Or true believers or people who think they can make money on eBay, right?
09:33 Speaker C
Well, it’s a reseller. Reseller, that’s for sure.
09:37 Speaker A
I think there will be a lot of them.
09:38 Speaker B
But it feels like a warm potato. It’s like, who’s who after all, what do you want to wear this morning? My open AI hoodie. I don’t work there.
09:44 Speaker A
That may be ironic. That may be ironic.
09:46 Speaker B
Yeah, I mean, now you’re like this.
09:47 Speaker C
Or if you want to get yelled at on the street, you’ll probably wear this.
09:50 Speaker B
Yes, I think they are cynical rulers. Well, I’m walking around Brooklyn and I’m like, oh, I don’t really like Open AI, but I’m wearing Open AI. I feel like there is a certain market for it. you’re probably right.
