On Our "Virtual Route 66" This Week With Some Mid-Month #RandomThoughts

 

We present a snapshot of the month that was in our World:

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We gathered another virtual panel of CEOs this week to share their early learnings from using generative A.I.—a topic that continues to dominate management and board meetings. PayPal CEO Dan Schulman kicked off the discussion with these observations:

“I do think that we are likely underestimating the impact that it will have. It will be pretty massive. For instance, we’re doing a lot of experimentation in code development right now, and we’re seeing a 30% improvement in productivity. Across all industry, front office, back office, you’re going to see 30% to 40% productivity increases.”

Schulman said the even more exciting possibilities come from using the technology to create new value for customers. And many small and mid-sized companies are finding that existing large language models allow them to drive change quickly. Here’s DataRobot CEO Debanjan Saha:

“A.I. has been around for a long time, but it required some statistician or mathematician to explain to people what it does. Not with generative A.I. It’s text in, text out. Everybody understands what it is, and a lot of people are trying to do it. Many use cases that are too small for people to build a special purpose applications are becoming really, really easy to do right now.”

Mark Newman, CEO of Chemours, added his industry’s perspective:

“As a chemical company…I believe our biggest opportunity is in the development of new molecules. We are in the business of material science, developing new chemistry, either for the energy transformation or for more sustainable thermal management. We’re in the early innings of using generative A.I. to do that.”

And Jeff Tarr, CEO of Skillsoft, the learning platform, said:

“Amost every customer conversation now starts with the need to prepare the workforce for this technology. Because every knowledge worker, if they’re not using it already, will be using this in some form or fashion in their jobs. And if we didn’t have a skills gap before, we sure have one now.”

But many large companies are still moving cautiously. Jason Girzadas, CEO of Deloitte U.S., cited the recent CEO poll that Fortune and Deloitte conducted highlighting some of the obstacles:

Large companies need “to develop more enterprise-level use cases. And then concerns around security and privacy and risk are absolutely paramount, in addition to the impact on the work force.”

(Deloitte sponsors this newsletter.)

Noting the difference in adoption rates between large and small companies, Principal Financial Group CEO Dan Houston said:

“The speed of adoption of A.I. is directly proportional to the size of your legal department. Larger companies are getting the brakes put on by the legal and regulatory department.”

Slalom CEO Brad Jackson agreed:

“I think, first, the barrier is going to be cost, and then privacy, and then ethics and then legal. But I think the big thing that’s going to happen here is this fear of going first, because of the brand risk.”

Either way, all agreed, the revolution is coming.  

1 The news: Apple is gearing up to release the iPhone 15 on or around September 22, following a launch event expected on September 12 or 13, as reported by Bloomberg. The upcoming phone is rumored to boast various enhancements, including thinner bezels, a faster processor, an updated camera, and USB-C charging. Details: Carrier partners have allegedly blocked employee time off on September 13, aligning with the schedule. Besides the iPhone 15 lineup, Apple could unveil updates for Apple Watch Series 9, Apple Watch Ultra 2, and iOS 17. The September launch tradition aligns with Apple's strategy to maximize revenue before the fiscal quarter's end.  What the numbers say: The timing will ensure the new iPhone is available throughout Apple's crucial holiday sales quarter, starting from October 1. However, recent weak iPhone sales have sparked concerns among investors. In its latest fiscal third quarter, iPhone sales dipped by 2% from a year earlier to $39.67B, and the company expects similar sales in the fourth quarter.

2 Tesla CEO Elon Musk said he may need surgery before participating in the proposed cage match against Meta CEO Mark Zuckerberg. The two billionaires have exchanged online jabs about a mixed martial arts match, which escalated after Zuckerberg launched Threads to directly rival Musk's X, previously Twitter. More: Musk announced that the fight will be live-streamed on X, with all proceeds going to veterans' charities. However, Musk said he's scheduled to undergo an MRI of his neck and upper back, which may require surgery, potentially postponing the match. In response to Musk's announcement, Zuckerberg questioned the use of X as a reliable platform for raising funds for charity. Zuckerberg said he's ready for the fight and suggested a date of Aug. 26, but Musk has yet to confirm. Zoom out: Musk, 52, and Zuckerberg, 39, have been bantering about the fight since June, with Musk preparing by lifting weights throughout the day. Musk is the richest man in the world, with a net worth of $227.5B, while Zuckerberg ranks seventh with a net worth of $110.1B.

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3 Tesla's CFO, Zachary Kirkhorn, unexpectedly stepped down after 13 years with the company. Vaibhav Taneja, Tesla's chief accounting officer, will take on the CFO role in addition to his current responsibilities. More: Kirkhorn, who was considered a contender to succeed Elon Musk as CEO, joined Tesla in 2010 and became CFO in March 2019. He played a significant role in achieving consistent profitability for the company. Kirkhorn will stay until the end of the year to ensure a smooth transition. Zoom out: This marks the second CFO replacement at Tesla in just over four years. Taneja has been with Tesla since 2017, joining through the acquisition of SolarCity, and previously worked at PwC for about 17 years.

5 Zoom is now requiring its employees to return to the office at least two days per week. The company's "structured hybrid approach" only applies to employees living within 50 miles of an office.  More: In a statement, Zoom said employees who live near an office “need to be onsite two days a week” because it’s “most effective” for the video-conferencing service. Zoom currently employs around 8,400 people, with more than half based in the U.S. Google, Amazon, and Salesforce have announced similar return-to-office policies in recent months. Zoom out: A July survey by Stanford University and others revealed that 12% of U.S.-based employees were fully remote, while 29% had hybrid work arrangements. Prior to the pandemic, remote work days in the U.S. were only around 5%. While many companies are opting for partial office returns, research shows that in-office mandates are unpopular among employees.

6 Microsoft is discontinuing its standalone Cortana app in Windows. Cortana, Microsoft's virtual assistant since 2014, trailed rivals Alexa, Siri, and Google Assistant in popularity. More: While Cortana will still be available in Microsoft apps like Outlook and Teams, the company is shifting its attention to AI-powered tools, including AI-based Bing search and Windows Copilot AI assistant. Cortana's support has been scaled back over the years, with previous removals from iOS, Android, and the Windows taskbar. The move underscores Microsoft's newfound focus on GPT-4 AI technology over the more basic voice assistant. A Microsoft support document mentions that AI experiences will still be available in Windows 11. It highlights Windows Copilot, the new Bing, Microsoft 365 Copilot, and the new voice access for controlling the PC with your voice in Windows 11.

7 Community Corner Last week, we asked our tech community, "Do you think that technology is making us more or less creative?" Here’s a highlighted response we received:  Madison Peter (p/Madison85), Developer at Delimiti, answered: “Technology can both make us more and less creative. On the one hand, technology can provide us with new tools and resources that can help us to be more creative. For example, we can use technology to create new forms of art, music, and literature. We can also use technology to solve problems in new and innovative ways. On the other hand, technology can also make us less creative. For example, we may become too reliant on technology to solve our problems, which can lead to us becoming less creative in our own thinking. Additionally, technology can sometimes make it easier for us to copy and paste ideas from others, which can stifle our own creativity.” Join the conversations at Inside.com, and we may shout out your name and business, or contact you for more! ️

8 QUICK HITS Wiz partnered with Wiley to create the AWS Security Foundations Guide For Dummies. This free 46-page guide includes techniques for securing AWS resources.*  Google has added an AI-powered grammar checker to Search, competing with Grammarly. Microsoft patented a new modular HoloLens device that appears more consumer-friendly, suggesting a potential shift in its mixed-reality strategy. The Alphabet Workers Union has accused Google-parent Alphabet Inc. of illegally terminating contract employment for most Google Help workers trying to unionize. Join over 5000 fast-growing companies around the world that trust Vanta to manage risk and prove security in real-time. Inside readers get $1,000 off.*

Barbie this weekend affirmatively answered a billion dollar question: Whether a movie solely directed by a woman, starring a woman in the lead role, could ever become a mega Hollywood success. Greta Gerwig’s Barbie has surpassed the $1 billion mark at the global box office, becoming one of just 53 movies to do so (not accounting for inflation). It is the only film solely directed by a woman to pass that threshold. Barbie‘s blockbuster performance has capped the summer of the woman consumer. The film, the mega-popular tours of Taylor Swift and Beyoncé (each of which has disrupted local economies), and the ongoing Women’s World Cup—already hailed as the “most successful” in history—have underscored the enormous importance of the female dollar. Some investors, like Angel City FC co-founder Kara Nortman, long ago noticed that women—fans of women’s sports, in Nortman’s case—were underserved. Once people are “showing up and caring about something, they become these very active consumers of content, of merchandise,” she told Fortune‘s Leadership Next podcast last month. If anyone still doubted the power of the female purse, this summer should have won them over. Swift’s Eras tour alone is projected to add $5 billion to the global economy. That show of force is all the more reason for women’s perspective to be fully represented in business leadership. And as Fortune’s Global 500 list of companies shows, there is still a long way to go. Just under 6% of those leading the world’s largest companies are women today, a record, but still far too low. The same goes for Fortune 500 companies, where 10% of CEOs are women. Firms that fail to understand and account for the female consumer are likely leaving dollars on the table. As Nortman put it, there’s a lot of upside. “I actually think it is going to be the biggest value creation opportunity I see in my career and many see in their career,” she says. More news below.  Peter Vanham peter.vanham@fortune.com @petervanham

TOP NEWS Berkshire cash Berkshire Hathaway increased its cash holdings to $147 billion last quarter, suggesting that legendary investor Warren Buffett is struggling to find bargains in today’s market. Buffett has dismissed worries about U.S. government debt after last week’s downgrade by Fitch Ratings, telling CNBC that he had bought $20 billion in Treasuries in the last two weeks alone. Berkshire also reported $26 billion in unrealized gains from its investments last quarter. Fortune Bad apple Apple lost $130 billion in market capitalization—worth more than the value of all but 50 U.S. companies—on Friday as investors worried about declining device sales. Chief Executive Tim Cook warned of a “challenging smartphone market in the U.S.” on the company’s earnings call last Thursday. Now, to justify its valuation at nearly $3 trillion, Apple may need to turn to services, which are not yet growing fast enough to offset weak device sales. Fortune Chinese pressure Chinese regulators are reportedly putting pressure on analysts and economists to downplay bad news and negative commentary on the struggling Chinese economy. Authorities want economists to “interpret bad news from a positive light,” said one advisor to China’s central bank. China’s economy is flirting with deflation, with consumer price inflation hitting zero in June.  Financial Times. THE TAKEAWAY ‘Fix It—or Go Surfing’: Jessica Lessin on What She’d Tell Her Younger Self By Jessica E. Lessin Ten years ago, almost to the day, my husband Sam took a video of me curled up in bed, convinced I had food poisoning. AI AGENDA AI Hype About AI ‘Agents’ Rises Again; Why GPUs Are So Hard to Find By Stephanie Palazzolo Like many others, I dream of having my own personal artificial intelligence-powered assistant to answer texts I’ve been avoiding or land that impossible-to-get reservation at a restaurant blowing up on TikTok. EXCLUSIVE E-COMMERCE TikTok Replaces Top Shopping Executive With Retail Veterans By Erin Woo TikTok has hired two retail veterans who worked at Amazon and Meta Platforms to help oversee its ambitious push to build a giant U.S. ORG CHARTS MICROSOFT GOOGLE Microsoft vs. Google: The 10 Execs at the Center of Lobbying Battle By Aaron Holmes A nearly decadelong truce between Microsoft and Google is over—and the rivalry could reshape tech regulation for decades to come. EXCLUSIVE APPLE SEMICONDUCTORS How Apple Will Save Billions of Dollars on Chips for New iPhone By Wayne Ma When Apple’s next iPhone goes on sale in September, its upgraded core processor will be more powerful than that of any rival smartphone.