Techstrong Gang – October 4, 2024

Hello everybody. I'm Mike Ard, and today we're talking about Gen ai. Might be Santa Claus, Microsoft might be the Grinch could as well.

They killed somebody's favorite new toy. And finally, the dock workers, because of AI are thinking about spoiling Christmas altogether. We'll be back in a minute.

You're watching text. All right, folks, welcome back. We have an awesome lineup for the gang today, and we're gonna start with of course, John Schwartz, who, um, as far as I know, is still the czar of Silicon Valley, apparently a little out there in the West Coast.

John, good to see you. Good to see you, Mike. Good to see everyone.

Happy Friday. All right, and then joining us is Lisa Martin, who is the CMO advisor for the FU group and is savvy in all things marketing. And well, that's gonna be a big theme today.

Lisa, how you doing? It is Mike, great, great to see you all and happy Friday. This, as John was saying, TGIF.

There you go. Guy Courier is with us as well. He is, um, A CTO and analyst with the FU group and works on their visual impact arm of the business unit and is, I think you're still in Austin today.

Is that true guy? I happen to be in Austin today, yes. But as you know, my heart remains in the Bronx.

Well, there you go. Go Yankees. Here we go.

All right. And finally, Mitch Ashley is still in his perch in Colorado, but maybe getting on the road soon. Yeah, for the time being, I'll be hitting heading to Barcelona, Sioux soon, and then a whole bunch of cities after that.

So good to be here with everybody. All Right, thanks for everybody being here. We're gonna start with this report that Adobe put out, and they were specifically citing that Gen AI was gonna lead to an increase in, uh, e-commerce sales for Christmas this year.

And of course, I scratched my head a little bit, but John, it's your story. So why don't you walk us through what's going on here? Well, You know, all created also to Keith Kirkpatrick over FU and Group who I basically talked to, and he gave me a rundown on all the reasons.

So he analyzed the Adobe report and basically there are several factors in play. 5 billion in online spending this holiday season. 8 billion, which is up about 8% from a year ago.

And there are number of factors, and as I mentioned earlier, buy now, pay later. Basically this idea, it conveniently intersects with predictive capabilities of ai. So we're creating more personalized payment options.

There's the use of cell phones, of course, which drives all of this. And there are also companies like Amazon, Google, Microsoft, are pushing their AI powered shopping tools. There's also advancements in national language processing and recommendation engines.

So in a sense, as Keith said, uh, gen AI is revolutionizing e-commerce, and particularly at how consumers approach holiday shopping. So I found it interesting. I know it's early, you know, it's, we're early October, but this is something that kind of plays into this idea that Gen AI is inevitable, and it also kind of will trace to our third block later today in kind of in a cause and effect.

But, um, I found that the study interesting, but more interesting to me were kind of the comments that Keith shared. Well, Lisa, I'm, uh, scratching my head as I said earlier, because, you know, I looked in my wallet before I got on this show and there's no extra money because of Gen ai. So I'm not quite clear where all this money's gonna come from and, you know, how are, we're gonna pay for all this shopping?

Ever anyone ever brought the good old days of layaway? I'm probably date massively dating myself, but I remember those days. Obviously the buy now pay later is transformed things.

But, you know, it's interesting what we see with Genai and e-commerce and retail. A lot of the tools that marketers use in the enterprise like Jasper or Grammarly Go and Tesia are being used in retail to really deliver what we all want as consumers. And that's that personalized, contextually relevant, real time shopping experience, that journey that allows us to be much more satisfied with the journey with the retailer, ultimately increasing sales.

And I think what we see these days is people on the spending side will find the money somehow. But as John was saying, the I now pay later Element is a contributor to this. So we've got Cyber Monday, we're early October, but Cyber Monday is around the corner.

Yes. Um, so it's gonna be interesting to see how the revenue comes into play here with a very different, uh, projection than last year. So One thing I was going add, and I'm glad you brought up Cyber Monday, Lisa, supposedly that day is gonna be a billion dollars, supposedly the first time.

I think it's the first time it's gonna reach that, that level and, and Mike as, as far as, um, not being, not having the money. When, when does that ever stop us from buying things iWay and paying later? Exactly.

Yeah. Here's why. There's so many factors that go, yeah, there's so many factors that go into spending more money and, uh, Adobe, which, uh, has a real interest in, um, the development, the further development of e-commerce, um, in all of its elements, um, just as core to its business plan.

Uh, I could see why it looked at that particular factor, which boils down to something that I think, um, the e-commerce industry, um, has been, uh, aiming for since the, the advent of online shopping and the internet, which is the, so-called Tailored Shopping experience or tailored buying Experience. You know, from a tech standpoint, ai, I mean, AI doesn't meet a, another killer app chat was already the, you know, chat bots are already the killer app, but if it, if it did, this would be an even better fit for that because, and generative AI in particular, 'cause what generative AI takes is some stream of data and predicts what is supposed to follow. And then, you know, simulates that, you know, that stream.

And in this case, the stream is not a stream of words, it's a stream of clicks and consideration of products and what streams you've looked at, what videos you like, all that stuff that goes into the shopping experience. So instead of the older pre AI method of algorithms and tuning and doing AB testing and all this other sort of stuff to give a semi tailored experience, this really, like, it brings everything an e-commerce experience has a shop online shopping experience has to bear into that generate AI model. So you, like, you're interacting with a bot now that can bring stuff to you, Mike.

I think the question is, people were gonna spend a certain amount on some stuff that they didn't want so much that they thought they wanted. Now the focus is so much more on something that's a lot more likely to please them. And let me just add one other thing to this.

Being a killer app, we say over and over again that with generated ai, you need the human element to make sure that it's correct. Inherently this says the human element because that's the buyer. So I do think that this can induce people to buy more because they're more likely to find the things that they want and can use and to be satisfied.

I'll be honest, I, I read this story with great fear and here's what, and, and here's what it came down to. Um, I have multiple children, I have nieces, I have brothers and all kinds of family members. And, um, each of them in my mind kind of artificially limits their Christmas list because they get tired of shopping.

Well, if they don't get tired of shopping, the damn list is gonna get longer and longer and more expensive. And so I'm kind of looking at this going, you know, can I turn this off starting after Thanksgiving? Maybe again with this Activity, the faucet's always gonna be on Mike.

Yeah, you're right. Yeah, that's a good point. I mean, I didn't think about even buying a book on Amazon and then getting these suggestions.

Now it's gonna be even more aggressive, proactive, and I'm probably gonna buy more. I mean, and I don't want to, but I, I fear that I'm gonna fall in that trap, but I already have it in a certain sense already. You know, so much of our buying experience is already underpinned by ai, machine learning, language, machine learning, uh, algorithms.

Interesting. Adding generative AI to this, right? Is it, is it being used as a more easier kind of querying tool?

Is it being used through a chat bot? What mechanisms? That's what I'm really curious to see how this is gonna show up in the buying experience.

I know personally, one of the benefits I'm expecting is just by happenstance, Mike, if you get a pair of pink fuzzy slippers, it's because my buying bot hallucinated and got you that product. So just Fyi, I'll have a good excuse this year if I make a mistake. But, uh, Mitch, it's really good to have you on this call and in this discussion, because what Mike brings up is the need for controls.

Mm-Hmm. Yeah. And then, you know, there's the security control side, but when you think about the whole world of compliance, which sounds very wonky and enterprise, this is a compliance scheme that each individual shopper would want to be applied so that Mike's extended, apparently highly extended family and friends network, can't go in and spend his credit card without him providing some kind of policy, you know, in more human terms or more everyday terms, right?

Yeah, it, it's, it's really important. You, you mentioned compliance, but also think about one of the best industries at directing you to content and helping fill searches, helping you fulfill on the site searches and rec buying recommendations, of course is e-commerce, uh, generative AI is still a sort of open wild west for many people. And how do you tighten that down?

If I, if I'm a major retailer, I don't want gen ai, you know, thrown out some weird stuff, right? I really wanted directing you based on the data that I've got, based on the inventory that I've got, based on what's selling now, all of that kind of thing. So, you know, you, you talk about compliance and part of that compliance is our own business.

You know, policies, business goals, things that we're trying to achieve and selling our products and services, and how well can we tune Gen AI to help us accelerate those versus wrong stuff. I'm pointing customers in the wrong direction. I'm, as soon as you see a problem, or as soon as they see a problem, they'll back it off, right?

They'll, they'll change the algorithm, they'll move something else into it. So to me, this is a huge learning experience for all of us to see what works and what really kind of wasn't a great idea for Gen ai. Lisa, Some of the things on the regulatory front, oh, go ahead.

Sorry. Oh, I was just gonna say, Lisa, that, you know, guy mentioned control and um, you know, from a marketing perspective, that's kind of a knee slapper, right? What control Yes.

Is what control, not talking About self control, this is a different control. Exactly. Well, marketers are really heavily leaning into generative AI tools like this I mentioned we see in the enterprise.

Jasper is a great tool that we see commonly used in the enterprise as well as in retail because it allows marketers to create this really customized content and curate based on, uh, their style, the style of the, of the, of the buyer, uh, the goals, the target customer. But something that I think about when we think about this, and you mentioned compliance and regulation, is AI ethics of data privacy. Where are those going to come into play here to protect the consumer who will probably get very wrapped up in an experience that is so tailored and customized that the control goes out the window.

But I think we have to understand where AI ethics and data privacy will come into play here down the road. Uh, excellent point. And this is a place where, you know, retrieve, augmented, uh, generation rag is a common term we throw around in generative ai, which is, it's a fancy way of saying we front end, uh, large language, small language models with our own content that doesn't go into the model that we can retrieve from other sources.

And sort of a common misperception. It has to be this thing called the Vector database, which is just a really fast way of finding content and associating, uh, enumeration of content. But that can be anything.

That can be your product catalog, that can be your knowledge base, that can be articles that have been, uh, you know, uh, re uh, people that have, uh, done ratings and reviews. So there's a lot of content that we can curate along with the logic and the data that we have within the models that's our own, that never escapes into it, provided we do a good job of securing it, maintaining the privacy, it potentially, uh, we have the ability to protect it. Let me put it that way, Lisa.

Whether we do that well or not we'll see, that's part of our, you know, our objectives of what we wanna do. You know, what I hate about Christmas, I hate shopping for other people and having the algorithms not realize that I'm shopping for other people. And then starting in January I get like invitations to books about, you know, how to apply DevOps theory to civil war battle things.

And it's like, you know, it's, it's, it's this mishmash of stuff that I'm kind of, you know, only partially made me interested Mike as long sub tweet opportunity star war destroyer, the really big one, you know, the $800, the Lego set. As long as you get me that, I'm happy. You have to look that the rest of the year.

I'm 2025, it's okay. By You took me really interest, interesting is the post-holiday report from Adobe really what the actual experience was like and whether that for tells even a bigger holiday season next year. Sorry Mike, I don't mean to break the news, but, uh, it'll be interesting to see what the cause of the effect were and what the actual reality.

It's, I think maybe an Argument a few months away could be made. Go ahead Lisa. I was just gonna say we're, we're only a few months away from knowing that information, John, that you bring up.

Great point of what's in the rear view mirror. I'm just touching back on, on Mike's earlier point. Is this really gonna be more spending?

And when you think about what is competing for people's dollars that they spend, a portion of it that is, uh, more effective and pleasing is can they, they still have the same of money, right? But they may spend less on, you know, other areas. I don't know what food staples, I mean, I don't know, but other areas because they're not having this experience and, and that, that those dollars shift to the online commerce.

I dunno, Usually the, the storyline is if you have some sort of technology that makes things convenient for consumers, they will dive head in and suffer the consequences later if they, if they so think their consequences. Well, we're gonna product Show up on the, uh, on the loading docks on the east Southern coast. We're, We're Segment We're gonna talk about that.

Maybe just the West coast Midwest folks, we'll all get good stuff. I'm not sure these coast folks might be hurting. It's True.

And the Gulf Coast. Yeah, we'll talk about all that stuff in a minute. So don't jump the gun.

But I, sorry, I'll ask John one question here. Do you think that more people might be concerned about not having a job in 2025 because of AI and may not spend as much because Yeah, that's great point. Look at the AI's.

That's a great point. I mean, this, this, uh, this austerity programs are in full swing, right? With the uncertainty about the, a lot of things, not just the election, the economy, wars, et cetera.

People tend to be more conservative. But I think if given the choice, and we are Americans, we love buying things on credit, I think there's a very good chance that people will spend regardless of all their fears. All right, well to John's point, the entire economy is dependent upon consumer spending.

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All right, we're back. And all those folks who apparently might have had a, uh, Microsoft HoloLens two headset on their Christmas list, well that's not gonna happen apparently, 'cause Microsoft pulled the plug. And it seems like a lot of these things are not livid up to expectations.

God, I know you play with a lot of these toys and have a love hate relationship with, but you know, when you heard this, what, what was your take on it? It's very curious and interesting, honestly. Um, I mean, you know, we're in tech circles, so the five of us on, on this, uh, uh, podcast.

What, but how often have you seen these vrs or ars in the wild, really? Um, and John, you're in Silicon Valley, you know, you've probably seen it more than any of us. You just don't see it all that often.

I'll be honest with you guy. I rarely see it. Yeah, yeah.

Um, it, to my sense, um, the number one application for these ar vr headsets in an enterprise setting, 'cause that's the target for, that's been the target for Microsoft for this is really more like, uh, um, uh, industrial medical, you know, specific, uh, areas where, um, a professional or a technician or someone like that would benefit from, um, that kind of superimposed interface, you know, a factory setting, you know, that kind of thing. But all of the press, or almost all, most of the coverage, most of the perception of this, of these devices is around ordinary daily consumer use. It reminds me to a fair degree, uh, uh, what's going on in autonomous driving.

Um, there's so much focus on city driving, um, taxis, that sort of thing. Probably to my mind, the number one application for autonomous driving is gonna be in trucking specifically. Um, the, this, I don't remember what they call this sort of mid range segment, um, after the long term Paul, between the warehouses outside of the city into the initial distribution points inside the city, predictable routes, all that other sort of stuff, right?

So, so when we take it back to this kind of, uh, a virtual reality on, uh, you know, um, augmented reality interface, uh, I I can understand, um, a limited application in daily use. What I don't understand is how Microsoft would not have already seen that and already pursued it. They certainly have the ability to provide an augmented user experience, um, in, uh, specific applications and for specific needs.

They have every element in their arsenal in order to, uh, make that work. So the curiosity to me is why it has it. You make a really good point, guy.

And I think the differentiation that you're making is in the consumer space novelty, right? Becomes shelfware. It's the latest PDA we used to get before we had smartphones, by the way, to use, use, uh, use these goggles or augmented reality, you do have to look up from your phone.

So that's the first problem you have to get people to stop looking at your phones, just start using these things, which is, you know, that's a big thing to get over. I, you know, I'd, I'd be humorous for a minute, or at least attempt to, uh, seriously, it's, it, it is a novelty. It's a gaming thing, uh, at home.

And oftentimes things get, get developed and perfected and look at the Nvidia chip and, and what we do with, uh, video cards and where that's gone, who knows where that's going to go to. But the other extreme is, you know, medical applications, manufacturers specific environments where, you know, like in an area, like in the, uh, jet aircraft, right? Uh, heads up display that's built into a goggle and that someone looks through same kind of thing, thing in an operating room where there really is a benefit to presenting just the right information of what they need and reducing the complexity of the rest of the world.

So you're getting what you need to perform the task. It's that area in between of, you know, we're not gonna walk around with, you know, we don't have our Google glasses anymore. Maybe they'll find another way to do that, but at some point it's gotta be helpful and useful and something you can't live without.

And that's where we haven't kind of crossed over into that, you know, killer app as we used to call. We may get there someday, but we'll learn a lot from gaming and from those kind of higher end industrial implementations. Right?

That's, that's exactly right. And Speaking app Apple pulled back on its headset as well, right? So this is a, not just Microsoft kind of issue, but I think Samsung is still out there, right?

Yes. Yeah, that's, I'm glad you mentioned it. 'cause uh, Mitch and Guy both touched on this, the perception at these precedents, and I've gone to too many of them where we walk away thinking, oh, this is a consumer product when in, in actuality it's for specific markets, manufacturing, construction, what have you, medical use and Google Glass kind of went away.

The Vision Pro is interesting. Um, the idea of wearing it, and by the way, I wrote a story about this a couple about a year ago, actually. Basically when you wear it is, so the Apple Vision Pro, it is so heavy and puts so much pressure on your face.

People are getting black eyes and getting headaches. So in the small print of Apple's introduction, they advise for you to use it less than 45 minutes at a time, actually 30 minutes. So there's this, this physical pain, there's this kinda misperception that is aimed for the masses.

And in reality, because of that, it creates this aura that doesn't live up to the hype. And I'm not sure if this is what happened with HoloLens, but I think this is something that's gonna continuously trip up VR until they get smaller, lighter and there's more of a killer use for the consumer Point. Yeah, I think Government point military's too point.

Yeah, yeah. Yes, yes, yes. The, the military is using it.

But you bring up a great point and, uh, John, and some of the things that, that we see from a market fit perspective are price, what are these 3500, 30 $800, um, use cases are still pretty limited and it seems more like a solution looking for a problem. And then John brought up the point of some of the physical side effects of, of all of these devices. It's just not there yet.

So the market fit isn't really there. Although Microsoft went after the enterprise market initially, um, and seemed to be doing decently there, but ultimately had a, a lot of strategic uncertainty, a lot of instability within the workforce, but I think ultimately the market fit just isn't there, right? Dare I say, wait, wait, wait.

My kids are using Gen AI to find one for 500 bucks on eBay. Hold on that Maybe the next 3D TVs, you know, we don't know. That'd be Christmas.

They go go away to the dinosaur here. We'll see, I guess. Um, so I did see one of these days in the wild recently, maybe once in the last six months, but I was driving up from New York and staying in a hotel and I was, came to this door with some luggage and there was a kid sitting on the floor on the other side, and he had the Samsung headset on.

And much to my surprise, I guess he could see me. 'cause he, he and the headset got up and came over and opened the door for me. And I was like, wow, you know, kids are doing all right these days.

I was kind of pleasantly surprised, but, 'cause I figured there was no way he could see me, but apparently he could see right through those things and just whatever he was doing, he was just kind of still in this world, which I thought was a good thing. But, um, to your point about the industrial use cases for these things, well, what happens to all those people who have been building applications and use cases for these things and business environments, they get a little torque. 'cause they just spent, you know, tens of thousands of dollars on these things.

So, uh, are they a proverbial outta luck guy? Oh no, the um, the funding, private funding, um, large company funding for this is not going away. Um, I don't have the data on it, but it, it's at least stable if not growing.

Um, I don't, that's again, what's so curious about this discontinuation, uh, by, by Microsoft, this particular news, the opportunity there is obvious. All the tools are available right now. Um, the technology is the software, the stacks, it's all available right now.

It's just a question of making the play. And there is a large high margin market available for this. That's kind of why I brought up government and military.

There are funding, external funding sources for this. I don't think these people go away. Some of them go get VC money, some of them join, you know, the next enterprise to try.

That's why we're gonna keep seeing, uh, the major companies take a crack at this. Google is working on its third, uh, a attempt. Apple truly has another attempt even though they're pretty consumer focused.

So I don't think this is the end of that at all. And I think that talent is gonna continue to develop. Possibly some of the wind has been sucked out of the sails of this by, um, all of the attention on ai.

But that's just temporary. All right, well if you need somebody to pay top dollar for something, you can always count on the government, right? All right.

Um, Lisa, precisely, why buy one thing for a billion dollars when you can buy two for 2 billion? I know, exactly. Exactly.

So Lisa, at the end of the day, is this a giant marketing miscue? Because you know, to John's point, it was basically over height as a consumer thing when it's maybe an industrial thing. I think it's a market misspent.

I wouldn't necessarily say it's a marketing problem, but I think that we've, we've talked about this, there are some really applicable real world industrial use cases and maybe organizations like Microsoft Apple Vision with Vision Pro should focus on some of those near term wins that are going to impact humanity and society at at best, rather than trying to make this fit the consumer space where clearly the market fit in the demand isn't there right now. I was actually at a tech field day a few months ago with Steven Foskett was doing, and there was a gentleman in the room on an Apple Vision Pro the entire time, um, which I was in, I was at that same one. You were, that's right.

Yeah. I was There and he seemed really engaging in what he was doing, but it was, it was one of those like, is this gonna become the norm? And it obviously, I think we're not quite there yet, but I do, we're respect and appreciate some of those industrial use cases.

Healthcare and military, to me, speak volumes because, uh, they impact all of us. I think one way to look at this too is these are platforms that they're creating, right? It's not like they're delivering the killer app with the goggles.

And yes, there's some, some apps that come with it, but they're expecting communities to take it, build software, build products, and, you know, they may fall off the edge of the earth. They may catch. And, and so it's part of de deploying a platform.

And if you're gonna base your whole company or Apple around has all become the Apple patient pro bad mistake, right? If you're putting it out there to see how far people will take it, what kind of the next generation applications that might be as much for r and d to tell you, okay, well really the next thing should have this. And so as we think about a next generation, if we're gonna do another product in that space, evolving what the hardware, what the platform and software that operates it needs to be, to catch up with being able to do with what we're gonna do with it, what we don't even know we wanna do with it.

Yet, at times, Gotti, am I the only one whose neck gets tired after about 15 minutes of wearing one of these things? Well, listen, if you were, if you were tilting at the, uh, at the, uh, proverbial grindstone as a laborer, you'd have a lot more aches to worry about, um, if you were wearing the headset than that. Uh, it seems to me that maybe this is speculating, but maybe the source of the problem is that it's the consumer divisions and the consumer side, um, that is, uh, of all these companies that are accustomed to, uh, the specific technology that goes into these things, this kind of embedded system and all that other sort of stuff that makes it a device rather than, uh, you know, a, uh, a repackaged computer and to your point, uh, Mike on ergonomics and uh, uh, fit and all those sort of things are critical considerations.

And the first versions or two of these things, if you know, I'll bring up the Newton, the apple Newton, again, they have these great concepts, but then in reality, they just sort of fall flat. So maybe that's where a lot of this marketing misstep is coming from is consumer versus business, all, all. Although of course, you know, Microsoft built this as an enterprise product.

There are Mars and Venus in a lot of ways, and that's what's sort of leading to, uh, a, a product that doesn't quite fit in the market that it's going into. And the whole thing, you know, blowing up, I don't know, but I'm pretty sure that one of my kids is gonna put these on their Christmas list 'cause they're gonna be like, dad, it's dirt cheap. Now's the time.

Well, what's gonna happen is you're gonna wake up in the morning not realizing you are wearing one 'cause you're lying down. And the tailored AI shopping experience is going to cause you to buy several new gifts before you've even gotten that of bed. It's all part of a nefarious plot to just gouges.

All right, I, I am looking forward to someday doing this show in virtual reality and we can all put our headsets on and maybe everybody watching it can put their headsets on and we'll see what kind of conversation we have from there. Ready Player one. There You come.

There you go. Un until then, we're gonna drop this for the moment and we'll be back in a minute. All right folks, so now we're talking about this dock worker strike, which I never thought I'd seen this, but actual people carrying signs that said, you know, people not machines and they're on strike, worried about automation and artificial intelligence.

And we've kind of heard some of this before in some other areas, and especially among the screenwriters was the, I think one of the first folks who were talking about it. And I think we're gonna hear more about it as we go along. But John, is this gonna become the next great social issue of our time?

It is developing into something just like that. You're right. 5 billion a year, is the latest conflict.

That is entangling automation, ai labor rights, and this growing resistance to, uh, automation among, especially among very strong unions. So they see this as a threat to their jobs. They think it's gonna eliminate some high paying jobs.

And we in a sense, saw something like this earlier with SAG AFTRA after strike last year. We had a recent video game performers work stoppage over the same issue. So I talked to a couple labor reps about this and they expect more disputes in the coming years as AI improves and is increasingly deployed throughout the, the workforce to improve efficiency slash costs, replace or assist humans.

Uh, we separately did another story that shows 70 per up to 70% of knowledge workers are gonna be assisted by some sort of bots in the future. So in a sense, this is a disruptive thing. I understand where the, the employers are coming from.

They think it'll be safer, especially for workers. 'cause there are a lot of incidents involving movement of very heavy products. So we also talked earlier about, about, uh, autonomous vehicles and I think you're gonna see increase of autonomous bots are fueled by AI on factory floors, not just on city streets.

I'm sure Amazon's doing it. So in a, in a sense, this is going to develop into more and more of a problem. And I think the reason why we're hearing it from the longshoreman is this union in particular is especially aggressive and they, uh, see this and they're trying to get ahead of it and other industries are watching, other unions are watching.

So I assume it's just gonna escalate. Yes. Alright guy.

Um, what's your take on this? And I'm asking the question because I feel like sometimes we're moving down the path of automation, but we're not really thinking through, well, what are we gonna do with all the workers we have and how are we gonna retrain these folks? And um, you know, are we kind of creating our own problem here?

I was interested in the way the sci-fi series and book series, the Expanse dealt with this because, um, they seem to think through it. Um, I don't take all of my cues from Sci-fi, but I take most of them from sci-fi. And the way they thought through it was, um, that there are like, unemployment is more common than employment and everybody gets basic services at a higher level.

Think of it as UBI, universal basic income. I don't know about retraining in, in, in a lot of cases, Mike. Um, I don't think that this is gonna happen so fast.

I definitely don't think it's gonna happen, uh, smoothly. Uh, we've been talking on this show a number of times about the what shoe is gonna drop, uh, in ai, um, what's gonna limit it. Um, one of the things that is gonna limit it is a whole lot of bad press when containers drop from cranes because of AI.

And uh, you know, something blocks a whole port or what have you, just to keep with the current theme. Um, nonetheless, uh, this, it's clear that job replacement is inevitable. It's just inevitable.

And that the people who are displaced, um, we are, I think it's also inevitable we're gonna treat them like human beings with dignity. And part of that is, um, helping them to continue some kind of pursuit or path they want to continue and are able to continue and give them the support and training to get there. That means a very different organization of I know nations state, what have you.

I don't mean revolution, I just mean a different approach to how to keep citizens happy and healthy. And that's coming and that's inevitable. And this is just the beginning and the initial skirmishes that overall, um, struggle.

You know, John, uh, uh, John, excuse me, guy, I think this is happening in a different climate too. 'cause you can think about, um, robotics and manufacturing and you know, it replacing jobs, just my personal opinion is most of the time, nearly all the time we say let the technology go where it's gonna go and the people fall out will be the people fall out. If there's job losses, there's job losses, they'll figure out something else to do.

And frankly, at least our government doesn't take much of a hand in really truly saying, well if we're gonna offshore all these jobs, then what are we gonna do with these people? Right? Putting programs or deciding how we're gonna help that transition to, to take place.

Not that the government solves it, but there's being part of the solution versus just letting it happen. I think we let it happen. The climate for this happening though is, is different with ai.

Number one is you have a lot of people, many, many people proselytizing that this is gonna replace white collar blue workers, blue collar workers. We won't need programmers, we won't need A, B, C, D, E and F. And of course that's not true.

At least it's not true in the Nero what's happening with AI in terms of jobs is it's augmenting most jobs, right? It's not truly replacing jobs, at least not yet. So there's a potential of transforming the work that people do over time versus you're out AI's in, right?

Kind of that binary choice. The other is we're doing this in a climate of strengthened unions, right? Every one of those things that you mentioned, John, you know, screen actors, guild, et cetera, most of them are because we've got stronger unions in place, whether you like unions or not, or you don't, um, you know, I happen to lean more in favor of it, but it's happening in a climate where people can collectively stand up against it and have some structure or some authority and power to be able to do that and push back.

So I'm actually glad this is the way that's, you know, dare I say, glad that it's happening this way because it's, it's lowering the BS factor of this replaces everybody's job in the world and, you know, we'll all have to go onto universal income. Hopefully not yet. Um, I'm not saying you're BS John, I'm just saying Yeah, that's sort of the mantra, right?

Yeah. Um, okay. Um, but it, it also slows it down and let's just say, wait a minute, before we start impacting all these jobs, let people be part of that solution and negotiate what their role's gonna be in it.

And I'm a capitalist, but I also believe in, you know, we need to take care of our people. To your point guy, I would agree with the assessment that better to have this conversation now than later. But part of the issue in my mind too is like, look, a lot of these people are, their identity is tied up with, um, their job, their doc works all of us through That way, aren't we all That way?

We all are. And, and when we take that away from people, they start to lose their sense of identity and then they start, you know, voting for things they might not normally vote for. And all kinds of stuff starts to happen downstream and it becomes a political and cultural issue here.

Um, so I guess maybe I'll go over to Lisa with this, but, um, is there a bigger conversation and, you know, as, as has become apparent in this series of discussions we're having, is this yet another marketing problem? You know, it's what it is, is it's tugging at heartstrings because you, you mentioned, um, Mike, I think some of the, some of the signs I wrote a few down, robots don't pay taxes, automation hurts families. Um, and we see that I I think it's a, it could become a psychological challenge if everyone's or the majority of people are, are tying their self-worth to their job.

I think that's a whole other separate issue. But it, to me, it seems like the workers aren't asking, they're not saying no to automation entirely. They want a voice in shaping how it's used and applied in their organization.

And another thing I think too, and I wanna ask guy what his thoughts are about this and and Mitch as well is aren't there oppor opportunities where companies that are embracing AI are gonna become more productive, such that there might be more resources and create creation of new jobs like we've seen historically. Is it, is it a, a balance shift to, to replacement augmenting, To my sense, um, at least with respect to generat generative ai, the focus on productivity is, um, is uh, misguided. I'm not saying there wouldn't be productivity boosts, but the main, uh, two benefits of, uh, incorporating AI are to, and I think this is a little counterintuitive, but the main two benefits are reliability and quality.

What I mean is that, um, especially in a service industry, uh, take your mind back to five years ago if you worked in a service industry, um, there's uh, deadlines coming up and people need to get work done and they make all the best plans in the work to do a 10th of the work each day for 10 days. And then in the end they do 90% of the work in the last four hours before the due, due, the time it's due, if not after when it's due. You're talking about college Career.

Yes. And I'm talking about your daily life. Uh, my, um, so, but I'm actually talking about my daily life and what uh, what AI does, um, in these kind of scenarios is it's like your buddy that just does a bunch of work for you and it all sucks, but at least it's there and you're making progress.

So, so the other thing is that now you have a cycle or two or three of the work that is being helped for you in this reliable fashion and you can focus more of your good brain juice on it. And that's where the quality benefits. So Lisa, I do understand the idea that productivity goes up.

My sense though is that value goes up, margin goes up, uh, that sort of benefit that actually can help fuel more jobs, uh, for more people who have these skills and capabilities. I think it just like, it took 20 years or something like that for the economists to say, oh yeah, PCs do make us more productive in the same way it's gonna take us maybe 10 years, but it's gonna take a long time before we can say AI is makes us more productive. It's a really good point.

Got point because there many studies have been done that's shown that we repeatedly overestimate the impact to technology and we overestimate, um, how long it's gonna take or underestimate how long it's gonna take to impact. You know, in three years we won't need any data centers anymore 'cause they'll be in the cloud. Will know there, there's still many, many more around than there are cloud data centers.

I think the same of this is true. So we, we've looked at this as part of the analyst research in looking at software development and DevOps and where is ai, um, making a play. It's interesting when I hear estimates of this is gonna replace A, B and C generative AI or whatever kind of AI is, and then I look at our data that says 72% PE of people not to, you know, quote the stats, but the respondents to our AI and DevOps survey said they're moderate to low at their skill levels in, in leveraging AI technologies.

You know, we're still learning how this process works and I'm very much in the AI augmented camp of there are some productivity gains to your, to your point guy, you know, but the focus is always productivity because we measure, we measure, uh, the productivity increase in our economic measurements, right? The investment, what's the productivity gain of that? So the focus is so heavily weighted on that.

The other other part of it is, I'm excited about AI in the technology world of can it help us with reducing technical and security debt? If that could, if it could help us do those things, can it help make software more secure? It's not doing that yet, but it could actually start to make some headway in doing that, even if it doesn't solve it.

So these, like, not just tangential, I'm gonna offload this off to an AI thing 'cause I don't wanna do it anymore. Those are those applications, but how do we elevate our game? And it could be producing FA software faster, but it could be better quality, more secure, and get rid of backlogs of problems.

So I'm not wasting, you know, investment on keeping the old stuff running as opposed to I've got those caught up and fixed. That's where I think the real productivity quote unquote benefits kind of come from. At least I'm hopeful that that's where we'll see it.

I Scratch my head and Lisa, maybe you can help me or work through this a little bit, but, so let me get this straighter. We're gonna automate everything and then we won't be people who won't have jobs, who won't have money to buy the thing that we automated. So I'm kind of like, I I, yeah, it's a, it's an interesting kind of flywheel that's in motion here.

I think though, what the workers are asking for, and something I said a minute ago is they want to have a say in where automation is implemented within organizations to guy's point to improve things like reliability, quality, to the point that I see a lot in from a marketing perspective, it's about efficiency and productivity. But you bring up a good point that there's a flywheel that that, or maybe it's a hamster wheel that we're in in terms of too much automation, replacing too many people that won't make the money to be able to buy the products that AI and, and automation are creating. I think, I think it's kind of cart before the horse, but I think that ultimately the human side needs to come into play here and those folks need to have a say in where it's implemented, um, to, to reduce quite frankly the anxiety that's around it.

So the doc I think the dock workers are, are looking at this and thinking we gotta get ahead of the problem because they're looking back at in the industrial revolution. Maybe some aren't, maybe some aren't. But I think some of them have in mind what happened in the auto industry when manufacturing the assembly line came along.

They're thinking about Amazon and their warehouses and their workers, how they were displaced by technology, I mean it's, it's, it's natural for humans to be intimidated or fear for their job security because of technology enhancements and I think they're trying to get ahead of it. But to your point, Mike, um, this is going to displace, I think eventually a fair amount of people and, and where they end up, where they land is more important to me in the long run. Well, and The political season, right?

And there's this saying all politics is local, all change is local. Yeah. Every one of us assess change as what's came back to me, whether it directly impacts me or, or kind of indirectly.

And I mentioned the, the, the union side of this. That's why we're seeing this pause and this pushback. 'cause there's enough, uh, there's enough power in the market to collect a bargaining that people can do that.

Otherwise it would just happen like the last change that happened in manufacturing or Amazon delivery or whatever it was, Right? Well, we'll see how this all turns out, but um, as my mind does occasionally wonder, I'm kind of like, well, let me get this straight. So maybe the cost of making things drops to near zero.

So I'll get that Tesla for about 500 bucks, which I should be able to afford with my universal basic income. So who nuts. All right folks.

Um, we'll be talking about this subject again. I'm sure we're just framing it in the future, but, uh, there's a lot at stake here. In the meantime, I want to thank everybody for being on the show and I want to thank you all for watching the latest episode of the Text on Gang.

And please stay tuned for all the episodes of Textron TV that are right behind that. And until then, we'll see you next week. Take care.

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