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Australian Financial Review

May 28, 2024

Big business braced for AI wave – and plenty of uncertainty


James Eyers and Sally Patten

Corporate Australia is preparing for a wave of change as artificial intelligence rolls out across every part of business, even as executives say they are unclear what the impact will be and are wary of being caught in short-term hype.

“AI is going to change everyone’s jobs,” said Adam Driussi, the chief executive of Woolworths-owned AI consultancy company Quantium.

“If I look at executive teams, I think probably in two years time, 30 per cent of the people around the table won’t be sitting there any more – and that’ll be the 30 per cent who don’t embrace AI, and don’t think about how they change their jobs.”

Mel Silva, the managing director of Google in Australia, at the Summit on Tuesday. Michael Quelch

Mel Silva, Google’s local managing director, told The Australian Financial Review AI Summit: “Hairdressers will use AI. Butchers will use AI.” Others said they were already using generative AI for customer services, and to assist programmers write code.

But for every new use, there are new unknowns. The regulatory outlook is unclear, the level of investment capital needed to keep pace is uncertain, and many employees lack curiosity to experiment with AI, or are nervous about how it will affect their jobs.

Stephen King, a commissioner at the Productivity Commission, said Australia was “probably at the top of the hype-cycle” and many companies were talking about application timeframes “that are way too short”.

“It takes a long time for any technology, including a general purpose technology like AI, to work its way through the system so that businesses are completely transformed to use all the capabilities, and those capabilities are, of course, also evolving,” he said.

Commonwealth Bank chief executive Matt Comyn said there was no doubt that companies would look very different in the next decade.

“[AI] is compared with, and not without reason, to previous times in history, whether that be the agricultural, Industrial Revolution, Scientific Revolution,” he said.

“You have to really try to separate between the hype near-term and the pragmatism. You don’t go from the horse and buggy and walk over and jump into the Tesla 3.”

Banks have begun deploying AI. CBA engineers are using it to write computer code 30 per cent more efficiently. Westpac is using AI to streamline mortgage applications. Suncorp is using geospatial models to predict insurance claims before they are made.

“I don’t know that it will be large in the near term, [but] over the medium and longer term, there will definitely be a reshaping” of the workforce, Mr Comyn said.

The bank has to consider “the skills that we really need for the future. We see people who are learning to work with [AI] effectively are becoming more productive.”

Investors are also seeing opportunities, even if those are ill-defined at the moment. Qiao Ma, a portfolio manager at Munro Partners, said Australian companies did not have to become the next Nvidia – the ultra-hot microchip stock which has surged as it invests in AI-enabled products – to benefit from a wave of change.

Munro Partners portfolio manager Qiao Ma: “We will all be using it, all the time.”  Oscar Colman

“We think everyone is going to benefit from AI, so if you’re a company that is innovating, you can most likely benefit,” she said,

“We will all be using it, all the time. So, every single company in Australia, if you’re innovating, can most likely benefit from AI. There’s a huge role from an innovation perspective for Australian companies.”

Australia’s natural advantage in renewable energy would make it key to housing the large number of data centres needed to sustain the growth in AI computing, Ma added.

“There’s a massive imbalance globally of renewable demand and renewable supply, so there are many ways for Australian companies to benefit.”

Her comments echoed those of Mr Comyn, who said Australia “should be thinking deeply” about how it could make itself the home of energy-intensive specialist AI data centres, powered by renewable energy, which could run local, large language models designed for sensitive industries such as defence.

Many use cases

Australian companies have been experimenting with generative AI technologies since the arrival of ChatGPT; many told the Summit they were now moving to integrate it into business processes.

Beyond the financial services sector, Telstra is deploying AI to identify scams, protect its infrastructure from bad weather, and help staff members find information from 2000 company manuals. BHP is using it to guide driverless trucks on its mines; it is helping store managers at Woolworths to stock shelves; and Canva has applications driving its image generation.

But the Summit heard there’s a long way to go before the promise of productivity gains can be realised at an aggregate level. Companies still need to organise data resources to enable information to be fed into models. The model for regulation is still being determined, and regulatory guidance on how existing laws apply to AI is lacking.

Several speakers raised questions about skills.

AI would not be the “magic formula” to drive productivity across the national economy, said Suncorp group executive Adam Bennett.

“Unquestionably, in individual use cases, there are opportunities to drive productivity, but when you aggregate that at a whole economy level, there needs to be a lot of other preconditions for that to be achieved,” he said, pointing to regulation and skills.

Suncorp’s Adam Bennett said the insurer can determine claims before they are made.  Michael Quelch

Westpac chief technology officer David Walker said the bank was also using generative AI to assist its engineering teams, and exploring an application to triage mortgage applications.

“We can use artificial intelligence to check our policies, our product definitions, and the quality of data submitted, so we can get back to the customer or the broker” to request additional information or recommend alternative products, he said.

But Business Council of Australia chief executive Bran Black said boards were acutely aware of the risks, legal and ethical, attached to the rollout of AI, “and how you manage those are critical to maintaining social licence so you can derive the productivity benefit”.

“I think everybody who’s operating at a senior level … in companies that are looking to roll out and deploy AI, they are acutely conscious of the worry that people have about whether or not they’ll continue to have a job,” he said.

Mr Comyn said he was not concerned that the big technology companies such as Google and Microsoft dominated the generative AI platform market.

“There are enough players and competitors. Talent is mobile,” he said. “It’s natural that some of the big players, who are putting enormous amounts of investment into [AI], would look to commercialise that,” predicting that prices would fall over time.

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