Venture capitalist Kai-Fu Lee sees a tidal wave of change coming over the next decade, caused by the myriad ways in which artificial intelligence will help companies and organizations do work more efficiently.
Dr. Lee, the chairman and chief executive of Sinovation Ventures and author of “AI Superpowers: China, Silicon Valley and the New World Order,” recently spoke to Wall Street Journal reporter Jared Council about AI and the role of chief information officers at the Journal’s virtual CIO Network summit.
WSJ: Across the enterprise landscape, what are some of the top AI use cases you see?
DR. LEE: Artificial intelligence is an incredibly exciting technology for enterprises. It can be used in any number of scenarios and departments.
When you feed a lot of data, it’s able to make smart decisions, predictions and classifications in many, many areas. Customer service, IT, human resources, finance, sales.
One example. We get a lot of customer calls, and we need to respond to customer questions and requests. Currently, it’s largely done by people who have access to the knowledge database in a company. But AI can do a much better job in aggregating all the data from a company, and also responding consistently by voice, or by text, through a chatbot interface, email or phone.
It takes a lot of work to build that infrastructure. But to take a question and provide an answer and have a conversation, whether by text or speech, would be one of the lower-hanging fruits in an IT infrastructure that would provide higher customer satisfaction, a greater consistency and lower costs.
WSJ: Is that a use case that is generating meaningful value for companies?
DR. LEE: Certainly. It’s a double-edged sword. The more successful you are with your AI, you’re potentially replacing jobs and displacing jobs that may cause reduction in force, so that has to be taken into consideration. I think we all would prefer to look mainly at the way AI increases profit margins rather than focus on job displacement. But, by and large, AI is designed to do tasks and things that people do. So, more and more significant portions of the AI tasks will have an impact on human jobs.
WSJ: Deep learning has really taken off. What are some of the use cases there that, again, companies can find value in using?
DR. LEE: Deep learning is the primary way in which we do AI or machine learning. And keep in mind that it functions quite differently from our brain. We think, if A, then B, if not C, then D. That is not how AI works. AI works by presenting it a large amount of data, teaching it the correct answer, and then it would learn to do that for new cases.
It can also be used, let’s say, for recruiting. We can have a lot of résumés coming in, and we want to match those résumés with job descriptions and route them to the right managers. If you’re thinking about AI computer and video interaction, there are products you can deploy to screen candidates by AI having a conversation with the person, via videoconference. And then it would grade the people based on their answers to your questions that are preprogrammed, as well as your microexpressions and facial expressions, to reflect whether you possess the right IQ and EQ for a particular job.
It could be an AI watching a salesperson in action, talking to someone else. Then, when the conversation is done, the AI would give advice to the salesperson, “Here’s how you might have done a better job in closing the sale.”
AI could be used in marketing or sales in determining what email content and wording to use to attract a greater open-and-read and response rate. And in finance, AI could be used to automatically go through the expense reports that are filed, and route them to managers for approval, and then forward on.
So it’s a lot of different tasks, but they all run on data, and they all run using deep learning as the algorithm.
WSJ: What do CIOs, in particular, need to do to help their companies prepare and best harness AI?
DR. LEE: As the CIO, I think your responsibilities are similar to the early days of the internet. You want to understand the technology, become someone who could answer questions, and become somewhat of an evangelist. AI means something different to every department.
It’s the same underlying algorithm, but for every department, it’s a different kind of application.
The second thing that’s really important is to make sure that the company has a very consistent way to manage structured data.
Because AI is trained on data, if you don’t have data, none of this will work. You can’t just hire programmers and do it, you need to have the programs, and then train it with data.
So, as the CIO, part of your main job is to maintain the data warehousing for the company, to look at the silos of the data, and try to break down barriers, to turn the data swamps into data lakes, so that they can work together.
WSJ: In your book, you say that by 2033, AI and automation will be able to do 40% to 50% of our jobs. How should CIOs be preparing?
DR. LEE: Keep in mind, technological progress has always replaced jobs. This one is going to be larger than before. In preparation for this, as an adviser to the CEO, it would be great if you could suggest what is the proper way, what is the likelihood that various tasks will get replaced, and really work out a way to do it that’s sensitive to employees. And start the retraining. As the jobs go away, help place them in the right new jobs that they’ve got training for.
WSJ:How might a CIO’s role change over the next several years?
DR. LEE: The exciting opportunity is to become the AI expert, and also contribute to the company in terms of technology adoption, cost reduction, margin improvement and also HR changes. But don’t think about this as a one-time change. The likelihood is that in the early days of AI, your role is more of an evangelist and go-to person and expert. Over time, AI will be everywhere.
In the beginning, think about 20 years ago, the CIO was probably teaching the marketing department, the customer-service department, what the internet was and how they should use it. So you should be willing and ready to transition and teach that responsibility so that as AI becomes pervasive, like the internet, you’ve done your job in that transition process.
WSJ: You encounter a lot of startups. What kinds of AI innovation are you seeing?
DR. LEE: Well, I’m based in China, and as you know, China’s the world’s factory. So I would say in the past year, the most exciting things I’ve seen are robots. We’re seeing really smart robots advancing quickly in factories and in warehouses. And these robots can have soft fingers, they can pick up anything. We have robots that sometimes look like people, or our limbs. But more often, they look like machines. So we have this investment in this giant laboratory robot. It completely automates a laboratory.
Whether it’s for Covid testing, or for research, it’s a giant machine. So I think the advancement of machinery, the mechanical engineering, combined with software, is pushing the speed of automation in factories and warehouses. And that’s an area that I think is most suitable for China.
In the U.S., Covid has made work from home a very convenient matter. And that has digitized the workflow of employees, which I think will cause an enterprise-level automation to take place.
It will become much easier, much more accelerated, for tasks and jobs to become automated in software in enterprises in the U.S.
So it’s interesting, U.S. and China have gone off in kind of two different areas, but both very innovative and exciting.
Write to Mr. Council at [email protected].
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