Generative AI dominates Davos discussions as companies focus on accuracy
Sam Altman, chief executive officer of OpenAI, at the Hope Global Forums annual meeting in Atlanta, Georgia, US, on Monday, Dec. 11, 2023.
Dustin Chambers | Bloomberg | Getty Images
DAVOS, Switzerland — The rise of generative artificial intelligence has dominated private and public discussion at the World Economic Forum as the world’s largest technology companies, including Salesforce, Microsoft and Google, temporarily take over local storefronts as a show of force to conference attendees.
While 2023 highlighted the technology’s ability, 2024 will be about increasing the accuracy of results so that executives in high-stakes industries such as hospitals and manufacturing can get comfortable using AI, said Intel Chief Executive Officer Pat Gelsinger in a CNBC interview.
“You’ve now reached the end of today’s AI utility,” Gelsinger said. “This next phase of AI, I believe, will be about building formal correctness into the underlying models.”
Whether it’s doctors relying on artificial general intelligence (AGI) for diagnoses, warehouses using it to check for assembly line malfunctions, or automated driving, humans need to get more comfortable with the accuracy of the technology, Gelsinger said.
“Certain problems are well solved today in AI, but there’s lots of problems that aren’t,” Gelsinger said. “Basic prediction, detection, visual language, those are solved problems right now. There’s a whole lot of other problems that aren’t solved. How do you prove that a large language model is actually right? There’s a lot of errors today. So you still need you know, essentially, I’m improving the productivity of a knowledge worker. But at the end of the day, I need the knowledge worker to say is it right.”
Pat Gelsinger, CEO Intel, speaking on CNBC’s Squawk Box at the WEF Annual Meeting in Davos, Switzerland on Jan. 16th, 2024.
Adam Galici | CNBC
The best way to improve accuracy is through experimentation and co-piloting tests to advance adoption, said Clara Shih, CEO of Salesforce AI. The AI can adjust to different standard deviation confidence levels as users get comfortable that the technology can be trusted in high-stakes scenarios, Shih said in an interview.
Three phases of AGI will guide adoption, Shih said. Phase one is actively using the technology as an assist for work. Phase two is consciously watching the technology in its autopilot mode to ensure accuracy. The final phase is letting go and trusting the technology will work to the confidence level of one’s choice, Shih said.
“You can tell the AI to be conservative for higher stakes until a human co-pilot essentially graduates it to autopilot,” Shih explained.
The three-phase approach, which heavily draws upon human acceptance of the reliability of the technology, should make AGI less scary than some have speculated, said Open AI CEO Sam Altman during a panel discussion Tuesday with Bloomberg’s Brad Stone.
“This is much more of a tool than I expected,” Altman said. “It’ll get better, but it’s not yet replacing jobs. It is this incredible tool for productivity. This is a tool that magnifies what humans do, lets people do their jobs better, and lets the AI do parts of jobs.”
The past year has been “a year of discovery,” said Nasdaq CEO Adena Friedman in an interview. The financial industry, including Nasdaq, will use AI to update old code to modernize aging systems, improving automated workflows which can save employees hours each day, Friedman said.
“It came onto the scene a little over a year ago,” Friedman said. “We did some experimentation. We started to kind of understand the potential of it. This year will be the year of activations for us and for everyone.”
WATCH: Nasdaq CEO Adena Friedman discusses economy, opportunities in AI at Davos
Oracle stock dipped about 5% on Wednesday following a report that discussions with Blue Owl Capital on backing a $10 billion data center in Michigan had stalled, although the cloud company later disputed the report.
Blue Owl had been in talks with Oracle about funding a 1-gigawatt facility for OpenAI in Saline Township, Michigan, according to the Financial Times.
However, the plans fell through due to concerns about Oracle’s rising debt levels and extensive artificial intelligence spending, the FT reported, citing people familiar with the matter.
This comes as some investors raise red flags about the funding behind the rush to build ever more data centers.
The concern is that some hyperscalers are turning to private equity markets rather than funding the buildings themselves, and entering into lease agreements that could prove risky.
Blue Owl did look into the project, but pulled out due to unfavorable debt terms and the structure of repayments, according to a person familiar with the company’s plans who asked not to be named in order to discuss a confidential matter.
Blue Owl is still involved in two other Oracle sites, the person said.
The person added that Blue Owl was also concerned that local politics in Michigan would cause construction delays.
Oracle later responded to the FT report, saying the project was moving forward and that Blue Owl was not part of equity talks.
“Our development partner, Related Digital, selected the best equity partner from a competitive group of options, which in this instance was not Blue Owl. Final negotiations for their equity deal are moving forward on schedule and according to plan,” Oracle spokesperson Michael Egbert said in a statement.
The cloud company did not name the firm involved in current equity talks for the project.
CNBC has reached out to the FT for comment.
The FT said that Blackstone is in discussions to potentially replace Blue Owl Capital as a financial partner for the data center, although no deal has been signed yet.
Blue Owl Capital has been the primary investor in Oracle’s data center projects in the U.S., including a $15 billion center in Abilene, Texas, and an $18 billion site in New Mexico, the FT said.
“This appears to be a case where the deal simply wasn’t the right one, and seasoned investors understand that success does not require winning every transaction,” Evercore ISI analysts wrote in a note on Wednesday.
The bank added that digital infrastructure remains a “core growth vertical” for the Blue Owl, noting an upcoming digital infrastructure fund in 2026 that would add to its $7 billion fund announced in May.
Oracle has $248 billion in lease commitments for data centers and cloud capacity commitments over the next 15 to 19 years as of Nov. 30, the company said in its latest quarterly filing. That is up almost 148% from August.
In September, the cloud computing giant raised $18 billion in new debt, according to an SEC filing. That same month, OpenAI announced a $300 billion partnership with Oracle over the next five years.
By the end of November, the company owed over $124 billion, including operating lease liabilities, according to the filing.
Oracle shares are down about 50% from the high of $345.72 reached in September.
Read the full FT story here.
Year-to-date Oracle stock chart.
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