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Chapter 1: What are the current challenges companies face with AI implementations?
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Hey there, we are Indosport with me, John Malloy. We cover sport and we have things like this.
If you ask Arsenal's defenders, Gabriel and Saliba, to play in that PSG team or that Bayern team, they would be exposed as much as those centre-backs were last night. Because effectively, the attackers were on top. Then you ask the question, how many defenders were actually on the pitch last night? Because none of the full-backs have no interest in defending. They're like wingers.
And I've seen Saliba and Gabriel in an open game in that League Cup semi-final doubleheader against Newcastle last season get torn apart by Izak. I won't have anyone convince me that they can defend in that space.
This is an Irish Independent Podcast. You are listening to The Big Tech Show with Adrian Weckler, sponsored by Deal. Deal lets you hire, manage, pay and equip anyone, anywhere. Visit deel.com slash bigtech. The Vatican makes, you know, and the encyclical made a very interesting point, and that was... there is a level of fever around AI that does almost resemble religious worship.
And some of its proponents, when you start, when you're like the CEO of Standard Chartered and you've drunk the Kool-Aid so much that you're referring to staff you're letting go as lower value human capital. Well, you know, The Pope may come out and describe you as being like one of the guys who's trying to build the Tower of Babel.
Hello, and you're welcome to The Big Tech Show with me, Adrian Weckler. Now, we're all freaking out about companies ditching staff for AI. But as it turns out, the actual AI installations are often flops, wonky tech, unsustainable subscription costs and unprofitable returns. are now becoming common. Large household names are experiencing this.
We've got the likes of Starbucks, Pizza Hut and Klarna, who have either scrapped or reduced major AI deployments, some to replace staff, because the AI made things worse or was more inefficient. And Uber's chief operating officer just suggested that AI tokens may be more expensive and less effective to use than human staff. It has run out of its quota for the year already.
In Ireland, one survey measured at least 720 million euro in bad or ineffective AI investments, while only 11% of big Irish organizations that have invested in AI here have seen any return at all. With over two thirds wondering whether there'll ever be a return. And that's according to William Fry's big annual technology report a few weeks ago.
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Chapter 2: How have major companies like Starbucks and Pizza Hut scaled back their AI projects?
I'm listening to the founders of OpenAI, of Anthropic, in the last couple of weeks say that, no, in fact, contrary to what they were saying for the last two or three years, AI is not going to obliterate the workplace and that there is going to be a role for staff.
Now, I'm conscious that they're also getting ready for big IPOs and they don't want to freak the market out, particularly the financial firms who they're hoping will back them and make them very, very rich. Even still, I think there is a vibe shift going on.
Yes, yes, I think so. And I think that the sort of the temperature last year was AI is going to replace everything. And then we had the tech layoffs there with Meta, I think it was about four weeks ago or five weeks ago. But that's changed. And even you gave, so the Uber example, there's the Starbucks example. I'm interested. I don't think it's going to come in and take everyone's jobs.
I think, you know, it's like you're going to have knock on jobs that are created. But I think maybe they were trigger happy, I think, in a sort of attempt to get an advantage. Companies have just wholesale bought into AI. And then realized that it's not the panacea that it was supposed to be.
There are two things going on. First on the subscription costs. So a lot of big companies that are involved in coding or engineering, they will buy AI compute from the big companies, the open AIs and the anthropics. And typically they use up tokens. Okay.
And there's this term called token maxing, where up to quite recently and up to now, there has been kudos for using as many tokens as you can as an engineer per month. But they're very, very expensive. So we're now seeing examples of companies that are blowing through literally tens of millions of dollars a month using up AI tokens. And they don't know whether they have anything to show for it.
So the example I mentioned was Uber and its chief operating officer is a guy called Andrew McDonald. And he told the US podcast the other week He said, and I'm quoting here, we're going to have to start talking about token consumption and the associated cost versus headcount. Because Uber went through its entire annual budget for AI tokens by the middle of April, I think it was.
And he was asked about, well, you know, what have you seen from that? Have you noticed any great efficiency? Are you making more money from it? And his answer to that was, well, that link is not there yet. He said, I think maybe implicitly there is more that is getting shipped.
But he says it's very hard to draw a line between one of those stats and say we're actually producing 25% more useful consumer features. And then he goes on to say, so if you're not actually able to draw a direct line to how much useful features and functionality you're shipping to users, the trade becomes harder to justify.
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Chapter 3: What warnings does Pope Leo provide about AI and human dignity?
Because he had just built it last year. And he says they're flying. He says it's been... You know, fantastic. They've had thousands of conversations to the point where he's actually sold it on to other retailers, the system. So, you know, it is important to say that AI systems are working for some companies and some investments.
The one thing I was struck by, though, was that William Fry, the technology report, and they had a big conference and I went to it and I was talking to their senior executives there.
And I raised this with them and said, look, you're saying this big report of large enterprises, you think that only 11% are seeing a return on investment there and that over two thirds are wondering whether they're going to see a return in the next few years. And like, do you not think that's worrying?
And like, does that not tell a story about the hit and miss nature of AI and maybe in turn why it's not time, you know, if you're being prudent and if you're if you want a successful enterprise to start getting rid of 20 percent and replacing the AI. Now, they had a more nuanced take on that, maybe because they've got big clients who they're you know, they need to keep the door open to AI on.
But they said, well, It's still early days in terms of enterprise investments. Companies are only starting to invest, for example, in agentic AI. So this is the idea of AI that it's beyond chatbot, it's beyond... specific software placements, it's now into the realm where it can take ownership or control of processes that were very, very time intensive.
So it's back to what Mark Zuckerberg was saying earlier in the year. when he was talking about AI and obviously he had the, the, uh, staff cuts in his mind. And he was saying that, uh, in meta, they're starting to see, uh, you know, examples where one talented person, he said with the use of AI can replace or do the work of what used to take a team weeks to do. That was what he was saying.
And that's been backed up by Brian Armstrong, CEO of Coinbase, which is currently cutting jobs also. And because of AI, he said the same thing. That is the go-to line that a lot of companies are using, that we are cutting jobs because... AI has changed the template for everyone and every company.
We're just slightly ahead of the curve and we're starting to adopt the technology that can do the work that used to take human employees.
Right. And specific to that, is it industry specific? For example, coding has come up a number of times. They're adding new features to Uber, for instance. Is there... An argument for the idea that when you have, I suppose, all these companies are looking to IPO and they're, you know, looking to raise funds. So their game is everyone needs it.
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Chapter 4: What evidence suggests AI is not replacing jobs as expected?
He was talking about middle management. Because that's a common thing in big tech companies who are laying staff off at the moment. A lot of them are in middle management. And he he's we know him in Ireland because he's insulted Ireland actually before Matthew Prince. But he he you know, he hasn't apologized. But a lot of people in the tech industry say no need to apologize.
You're just calling it as it is. And it's that sort of like. A lot of people in the tech industry and engineers, they love that sort of, you know, reductive utilitarianism. Yeah.
It's the Elon Musk kind of machismo.
This is the correct order of things. Now, there's one extremely important figure who took issue with this and who has kind of put them in their place for now. It's Pope Leo. So I don't know if you read Pope Leo's encyclical.
Yeah.
But I went through it and I thought it was really, really interesting in the way that he tackled that. He described, he took issue with that. And he described, he said, at the root of these problems lies a technocratic and post-humanist mentality that tends to regard the human person as an object to be manipulated or a resource to be optimized.
And he talked about the unchecked pursuit of profit. But he also talked about this idea, he really knocked this idea of AI worship, you know, calling it idolatry, right? And he referred to it. He used the example of the Tower of Babel. I don't know if you know your Bible well, but the Tower of Babel is a story in the book of Genesis.
And essentially, you know, the people got notions about themselves and thought that they could, you know, almost kind of be on par with God. And they built this giant tower, right, to go up into the sky.
Okay.
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Chapter 5: How are companies measuring the effectiveness of AI investments?
They are designed to attempt to be relevant. Was it climate change last time or was it? So that would have been Pope Francis, wouldn't it? The last one. I can't remember actually what the last one is on. If it didn't affect tech, maybe I didn't pay too much attention. But the encyclicals. Like there have been a few of them and, you know, sorry, a few of them.
There's been many of them because popes tend to write them. But they are studied things that are supposed to they're supposed to be relevant. Now, Pope Leo, you could argue that Pope Leo has he has come into the middle of it and he hasn't shied away from fights like J.D. Vance, for example. has praised the encyclical. And I was surprised at that until I thought about it. And I remember that J.D.
Vance had a go at the Pope when the Pope took on Trump over the wiping Iran off the map remark. And the lash back against J.D. Vance, even among Republicans in the U.S., J.D. Vance doesn't want to take on the Pope.
Is that him eyeing up VP?
Well, no, no. It's just his own political health. I mean, the Pope is more popular than J.D. Vance in the States. And even though, you know, Trump may not, even Trump hasn't had a go at the Pope over this. So it looks like the Pope has carved out enough political and cultural power, even among, you know, J.D. Vance and Trump supporters, that they are afraid to have a go at him about this.
So he's carved out, he's put his elbows out. There's one great photo of, of Pope Leo, because, you know, he's from Chicago, Southside Chicago. I'm from Chicago. And there's a great photo of Leo on a plane with a baseball bat.
OK.
Right. Standing over a bunch of people. And he just looks like a guy you wouldn't mess with. He's from the south side of Chicago. That's the tough side of Chicago. Yeah, the murder rate was really high in the 90s. And one other thing about Leo, just while we're on the subject. So he's not a Luddite, but he's also not woke.
So Robert Prevost, who is the bishop before he became known as Pope Leo, he was a voter in Republican primaries. His brother, Louis, is full MAGA. So his gene pool is a Republican gene pool. It's not some sort of woke AOC, you know, Democrat gene pool. So he's coming at this from a very, very mainstream, even maybe slightly right of center. And look, he's the Pope of the Catholic Church.
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