Stanford Report: How AI is really changing the business world

It's easy to say that the rise of generative AI is having a major impact on the business world, but when you look beyond the high-profile case studies and tech industry hype, how accurate is that claim in reality?

One useful place to get a deeper level of insight is the Stanford Human-Centered AI Institute's (HAI) Artificial Intelligence Index report. Now in its seventh year, the report aims to paint a detailed picture of the current state of the technology.

Big Think spoke with Nestor Maslej, editor-in-chief of the report and research manager at Stanford HAI, to ask what this year's report tells us about how the business world is embracing new AI technologies.

Big Think: How would you sum up the current state of business adoption of AI?

Masley: It's gradually increasing, but I don't think we're at the point yet where companies are jumping in at scale. That said, I think there's a lot of compelling data out there that shows organizations should consider doing so. There's some very good research. [consulting firm] Every year, McKinsey surveys company executives and managers asking them if they are using AI, and this year the figure rose to 55%, one of the highest figures they've reported since 2017.

Try Big Think+ for your business

Engaging content on key skills taught by world-class experts.

There's a lot of really interesting data in this report that shows how AI is related to increased worker productivity, improved quality of work, and workers getting their work done in less time. There's also data that shows that companies that have adopted AI are seeing measurable revenue gains and measurable cost savings. There's also a lot of really compelling data that shows that AI is really good for companies, so it wouldn't be surprising to see more AI companies adopting this technology.

Big Think: If AI becomes more widely adopted, what do you think its impact will be for the business world?

Masley: Questions remain about what impact AI will have. Will it lead to people losing their jobs? Or will it lead to reskilling within companies? When we look at the data on how business managers expect AI to impact their organizations over the next three years, we see that many managers report that they expect job losses. Significantly more respondents expect job losses than job gains.

Nestor Maslej, research manager at Stanford HAI and editor-in-chief of HAI's Artificial Intelligence Index report;

We will probably see a little bit of both, to varying degrees. But the extent to which we see this change will depend a lot on the decisions of policymakers and business leaders. If AI makes you more productive, it might keep your productivity levels the same. But it might also make you more productive and allow you to do even more. So the question of which direction to go is going to be up to businesses and policymakers to decide.

Big Think: Is there a gap between business leaders' attitudes towards AI and those of the rank-and-file employees?

Masley: One interesting trend we noticed in this year’s Index is public opinion on AI. [Market research company] Ipsos has been conducting surveys for several years now, asking respondents how optimistic they are about AI and what their perceptions are of the impact it will have. Higher-income earners appear to be much more bullish on AI than their lower-income counterparts. Similarly, those with higher levels of education are much more excited.

And when looking at questions about how AI will impact current jobs and whether people feel AI will change the way they do their jobs, the index shows that decision makers and organizations are much more likely to agree that AI will change the way they do work compared to non-decision makers.

It certainly seems like there's some difference. It's hard to know how much of a difference there is on a quantitative level, but in a lot of polls, one of the biggest concerns that people often cite about AI, and the reasons they're worried, is the fact that AI could potentially lead to job losses. This is definitely something that a lot of people are thinking about very critically.

Big Think: One of the key takeaways from the report is that AI has the potential to close the skills gap between low-skilled and high-skilled workers. What does this mean?

Masley: AI can also act as an equalizing force. Several studies have given one group of participants AI tools and not given another group of participants the tools, and compared their performance. In most of these studies, the group that got the AI ​​improved the performance of both high-skilled and low-skilled workers, but the absolute gains were higher for low-skilled workers than for high-skilled workers, even though high-skilled workers still came out on top overall.

This suggests that the skills gap may narrow as AI helps many of these lower-skilled workers reach levels they couldn't necessarily reach before, meaning businesses may be able to do more with less. Companies can take advantage of lower-skilled workers and enable them to do more meaningful work.

But it does suggest that more highly skilled workers still command a premium and maintain a relatively advantageous position in the organizational hierarchy in terms of what they can and cannot do.

Big Think: Geopolitics is becoming increasingly fragmented, and AI is one technology where countries are eager to gain an advantage. Could this technological advancement and governance divide create new competitive pressures for international companies that use AI?

Subscribe to our weekly emails

Masley: One of the big changes now compared to the past is the emergence of new regulatory regimes around AI. The way the US regulates AI technology is very different than the way the EU regulates it. So a lot of companies that are integrating these tools, especially those that operate in an international environment, really need to be aware of what these different regulatory regimes are.

Also, because this technology is so new and many of the laws have yet to be written and likely decided in the courts, companies need to be proactive in thinking about the various challenges that may arise and the various regulatory hurdles they may face.

There are many companies today that are doing a great job with AI regulatory compliance. Any company with sufficient resources can get great AI models anywhere in the world. The question is, how do you leverage it for your business, and does that business use case comply with new laws that are emerging?

Big Think: Do you think there is a risk in companies rushing into AI adoption before it is fully clear how AI will impact the business world and the economy at large?

Masley: While we at the Index cannot say what the level of risk is, we think that if we look at the trends, the data is clear that AI is going to be a game changer for business. And companies are always looking to reduce costs, increase revenue, and improve productivity. So the data points to the fact that companies are going to use AI more.

I think companies need to be careful about how they use these tools and what the potential consequences are. This ties into the point I made about regulatory compliance. Clearly, AI is a tool that can really accelerate the work that businesses do, but it's also a tool that can have a variety of impacts if misused.

If a company is thinking about integrating AI tools, they need to think hard not just about integrating, but about how to do it responsibly, in a way that improves business but doesn’t cause trouble. [in the third chapter, looking at responsible AI] It's true that many companies are thinking about this aspect of responsibility, they just aren't acting on it as much as they would like.

It's not enough to just dive headfirst into integrating these tools. Companies need to think very critically about how they do it in a responsible way, and they also need to be mindful of what the long-term impact of integrating AI tools will be.