A year of uncertainty
It has long been said that the only certainty in life is that nothing is certain. That has become our constant and the most accurate description of the environment in which we live and work. Even in such circumstances, the period ahead cannot be described as a "usual" uncertain year. Global instability and frictions are at their peak, while the relationships of the world's greatest powers and leaders change weekly from close and friendly to completely antagonized. Of course, all these geopolitical tensions negatively reflect on the capital markets where, after a longer period of stable growth, there is now significant instability and volatility because of these tensions. Cryptocurrencies, stars of positive returns for the past few years, are experiencing a steep fall of 30% just in the last three months. Tech companies are increasingly facing criticism that their market capitalization, considering their revenues, is excessively large, and the future of their cash flows is questionable. In the world of finance, people are increasingly talking about an upcoming economic crisis and a bubble linked with artificial intelligence that is about to burst, potentially causing something similar to what happened in 2008.
The history of world economic crises teaches us that they do not necessarily come when everyone expects and talks about them. They come suddenly, when least expected and in a way that, with a few exceptions, hardly anyone predicted. Of course, not all crises are of the same intensity – the one from 2008 was called a "hundred-year” crisis and it is hard to imagine something similar looming, especially considering that the balance sheets of the banking sector are in much better shape than before that crisis. For example, looking at the results of the domestic banking sector for the first three quarters of this year, it seems that this year will be one of the most successful ones with a return on equity exceeding 20% and an unprecedentedly low NPL ratio of only 2.2%, all in a year marked by a decline in interest rates on euro placements.
While these figures are tangible reality, artificial intelligence both is and isn't. AI, practically the holy grail of digital transformation, has in a short time gained enormous trust of companies and investors around the world. That trust is followed by investments – specifically, 700 billion dollars of global investments that are already collected, with a projection of another 3 trillion in the next three years. Companies, but also entire nations, participate in the AI race, and leaders change week after week. The biggest contenders for the title of AI superpower of the 21st century are China and the USA, and time will show what is more superior – American dominance in chip production and the most advanced research or Chinese cheaper and more efficient open AI models.
The existence of technology is not a guarantee of its success and implementation. Gartner's research conducted among CFOs of global companies showed that 74% of the companies see an increase in productivity as the main AI benefit, but only 5% of them managed to reduce costs, while only 6% have so far seen an impact on revenue growth.
Even in such circumstances, the transformational potential of AI to boost productivity and corporate performance is immense. If AI has not yet reached your business sector, rest assured that it is definitely on its way and that it is not deviating. Although we still cannot comprehend the full impact of the changes ahead, every serious company must ask itself: how can I leverage the opportunities that AI brings? Processes that previously took weeks, today with the help of AI technologies are completed in one day. Those who do not understand and are not ready to take advantage of the opportunity provided, have no clear future.
No matter how complex and uncertain the period ahead of us is, we have no choice but to prepare for this complexity in the best way possible. That means everyone in their industry needs to make their business more resilient to the coming changes, and AI can play a key role in this. On the other hand, we cannot expect AI to be the solution to every problem and the answer to all questions. A few weeks ago, I took part in a large autonomous robotaxi experiment in Austin, Texas. It is very interesting that Alphabet and Tesla have invested hundreds of millions of dollars in autonomous driving, and we are still not at the beginning of its mass use. On the other hand, it takes just over 20 hours for an average teenager to master the basic technique of driving. The point is that human intelligence and the ability to put things in a broader context are irreplaceable in many areas and machines still have a long way to go to change that. The key to success is smart use of technologies, respecting regulatory requirements and ethical principles in data management, but at the end of the day, it is smart people in the driver’s seat who will determine the outcome of this race.
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