The rich and powerful are in Davos, Switzerland, for the third day of the World Economic Forum. BI speaks with people on topics from AI infrastructure to the economy under Trump. This is what we are hearing on the ground.
The World Economic Forum brings together the rich and powerful to discuss topics ranging from Donald Trump’s economic impact to the impact of AI on industry.
This is what Business Insider is hearing and seeing on the ground.
The main character this time is Trump.
It seems that no conversation in Davos can last three minutes without Trump’s name mentioned. In an interview at Bloomberg House on Tuesday, Google Chief Investment Officer Ruth Porat said she felt there was a “huge opportunity” to work with Trump 2.0.
“I think the president and his team have made it clear that they believe technology is a national asset,” she said. — Hugh Langley
Europe feels lacking in activity
The need for Europe to step up was a recurring theme in conversations with business and government leaders. Geopolitical and economic uncertainty is top of mind for everyone.
Business leaders are excited about America’s new president and Asia boasts some of the world’s fastest-growing economies, but Europe appears to be left out of the equation. Walking along the Davos promenade, the presence of American, Asian and Middle Eastern delegations is unmistakable. But where is Europe? So, where is England?
One CEO I spoke to on Tuesday night emphasized that Europe’s regulatory landscape needs to change to make it easier for businesses to operate there. “What Asia is gaining is what Europe is losing,” he said.
Another executive said Europe is a major topic on the agenda at Davos, but its presence feels diminished. Wipro’s global CEO Srini Paglia said European growth and regulatory challenges are key concerns this year. “I was at this last session, where European presidents were present, and they asked how the EU could reduce the regulatory barriers that are holding back growth. I think that’s one of the big conversations we’re having.” — Spriha Srivastava
AI infrastructure is getting a boost, but what if it’s too big?
If you still doubt the future impact and benefits of AI, here are 500 billion reasons why you shouldn’t do it.
Anne Hocker, global head of technology practice at Bain & Company, said Tuesday’s announcement of up to $500 billion in private investment in AI infrastructure shows “how much people believe in the potential of AI.” He said he is doing so.
“It’s true. You’re going to get a really great ROI,” she said.
One thing to keep in mind is the balance between supply and demand. While this project aims to meet growing infrastructure needs, balance is key. Scarcity is bad, but the reverse is also not ideal.
“You can argue both sides of that. The use cases are picking up. People are starting to realize the ROI and as they build out data centers they’re going to use up all the capacity,” Hoecker said. Ta.
If they don’t achieve the ROI that people were hoping for, he said, the question will be: “There’s excess capacity building up, but is it going to grow as much as it does in other innovation cycles?” said.
It’s not easy to wait for industry needs to catch up with existing supply. In addition to the cost of owning unused infrastructure, there is also the risk of technology becoming obsolete.
“Each generation of chips becomes more powerful and more energy efficient. So, does too much capacity in an older generation impede your ability to move to the next generation? Do we use it up? So, ideally, we don’t overproduce it in advance of demand,” Hocker added. — Dan Defrancesco
Leaning towards the “experience economy”
BI’s Spriha Srivastava moderated a panel discussion on the experience economy. World Economic Forum / Greg Beadle
One of the big topics this year is how countries can navigate the evolving global economy. As protectionist policies expand and trade dynamics change, how can economies build resilience and drive sustainable growth?
One idea on the table is leaning into the experience economy.
I spoke on Wednesday about how major events like Taylor Swift’s Elas Tour, the FIFA World Cup, and the Olympics can bring investment, job creation, and long-term urban development. He served as moderator for a panel titled “Profits.”
The panel discussion was attended by various industry leaders, including Her Highness Sheikha Latifa bint Mohammed bin Rashid Al Maktoum, Director-General of Dubai Culture and Arts Authority; Sir Martin Sorrell, Executive Chairman of S4Capital plc. Patrice Louvet, CEO of Ralph Lauren Corporation. Anna Marks, Global Chair, Deloitte;
The experience economy is more than just entertainment. It is a powerful force for economic transformation, boosting industries such as retail, sports, hospitality and tourism.
But while these events generate billions of dollars in revenue, hosting them is no easy feat. Everything from infrastructure investments to security and sustainability concerns may require close collaboration between governments, businesses and local communities.
But the true power of these events goes beyond economics. At a time when loneliness is on the rise and digital interactions are the norm, large gatherings remind us of the value of in-person connection.
As the global economy searches for new growth strategies, will the experience economy be the key to driving resilient, inclusive, long-term economic success? We aim to find out at next year’s Davos . — Spriha Srivastava
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Nicola Mendelsohn, head of Meta’s global business group, said in a Davos roundtable with BI that the company had been talking to advertisers in recent days to reassure them that nothing had changed. . Mendelsohn said advertisers can stop their ads from appearing next to political content if they wish.
“What they really shared was reassurance that all of our commitment to brand safety and brand suitability on the platform remains the same,” she said. — Hugh Langley
Google DeepMind CEO says we need new institutions to ensure human-like AI doesn’t harm humanity
Bill Nye interviewed Google DeepMind CEO Demis Hassabis at Davos. Hugh Langley/Business Insider
Google DeepMind CEO Demis Hassabis had a busy Tuesday at Google Haus, doing two interviews almost back to back. If there’s one big lesson, it’s Hassabis’ assertion that we haven’t thought enough about the big picture of AI. “I think there’s too much hype in the short term,” he said. “The reality is that the amount of transformation that will occur over the medium to long term, five to 10 years, remains underestimated.”
In response to questions from BI, Hassabis said he believed there were big questions about capitalism and society that needed to be pondered. “One of the big things for economists to think about is how it affects money, the capitalist system, and even the concept of corporations. I think it changes everything.”
Hasbis said we need an institution that is “moment-ready” – a governing body that can ensure that artificial general intelligence (AGI) is managed in a way that benefits humanity.
“We’re going to have a wise council there, an international council of very diverse, bright people from different backgrounds. It’s not just engineers. I’m talking about philosophers, Social scientists, writers, etc. But who is establishing that institute? That’s what I want to ask, and I think we really need it.”
He also discussed his work with AlphaFold on protein folding, which recently won a Nobel Prize. And who better to talk about science than Bill Nye, the science guy who grabbed the microphone for our second interview? — Hugh Langley
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Consulting firms gear up for a big year
Consulting firms are gearing up for what is expected to be a big year for business thanks to the potential changes on the horizon.
“Several macro factors have been at play for some time, AI of course, but also strong economic indicators in the US and the current pro-growth sentiment in the market as a result of the incoming administration. It’s a possibility,” Sharon Marcil, BCG North America chairman, managing director and senior partner, told me.
But large-scale expansion comes with its problems, as was evident in 2021 when a surge in M&A activity led to employee burnout across financial services.
While a complete repeat of the record year of 2021 seems unlikely, staffing is still something to consider. It’s a difficult balance. There needs to be enough workers to ensure that resources are not too scarce while avoiding a surplus of not enough work being done.
It’s also not a quick fix because of the training period required to hire new talent. And it would be nice to be able to tell clients to hold off on trading, especially after so many people are sitting on the sidelines waiting for the market to open.
“For us, during periods of increased activity, we need to predict staffing levels, and that can be difficult at times. There’s a sweet spot between understaffing and overstaffing. If we find out, we’ll try other approaches, such as: Cycle hiring is definitely a balancing act,” Marcil said. — Dan Defrancesco
Proper snow boots are the way to go here
BI’s Dan DeFrancesco pairs a suit with snow boots for the ultimate Davos look. Dan Defrancesco/Business Insider
Three days into it, we still haven’t touched on one of the most interesting discussions I found in Davos: shoes. Since we are in the mountains, there is plenty of snow and ice, so choosing regular business shoes or heels is not necessarily the best option.
Boots that are both sturdy and fashionable are popular. (I don’t say “suit and boots” without permission.) Some people wear spikes that can be taken off and put on.
Personally, I did my best to choose the right snow boots. It’s a little…uncomfortable to wear it every day with a suit. But my daughter thinks I look like Kristoff from Frozen, so that’s a win.
Of course, some people are cautious and still choose dress shoes. Status is important in Davos, and the luxury of wearing regular shoes, as you are chauffeured around, is testament to this. — Dan Defrancesco