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Stanford report: How AI is actually transforming the business world

Nestor Maslej, research manager at the Stanford Institute for Human-Centered AI (HAI), talks us through key findings in the 2024 AI Index Report.
A row of four black office chairs sit in front of a large oval digital screen displaying a green matrix pattern, symbolizing AI business impact, in a modern white room.
Getty Images / Unsplash+ / Google DeepMind / collage by Big Think
Key Takeaways
  • Data suggests that AI is associated with more productive workers, and with work of higher quality.
  • A substantially greater number of business managers anticipate decreases in the number of jobs compared to those who anticipate increases.
  • AI could serve as a leveling force but higher-skilled workers are still maintaining their relatively dominant position in the organizational hierarchy.

It’s easy to say that the rise of generative AI is having a huge impact on the business world. But how accurate is that assertion in reality, if we search beyond high-profile case studies and tech industry hype?

One useful place to look for a deeper level of insight is the Stanford Institute for Human-Centered AI (HAI)’s Artificial Intelligence Index Report. Now in its seventh year, the report aims to paint a detailed picture of the current state of the technology.

Big Think spoke to Nestor Maslej, the report’s editor-in-chief and research manager at Stanford HAI, to find out what this year’s edition tells us about how the business world is embracing new AI technologies.

Big Think: How would you summarize the current state of business adoption of AI?

Maslej: It’s slowly ticking up, but I still don’t think we’ve seen a point where businesses have massively jumped on board. With that said, I do think there’s a lot of compelling data to indicate that organizations should be thinking of doing that. There’s a really good survey that [consulting firm] McKinsey does every year where they ask business executives and business managers if they’re using AI. And the number [reported by McKinsey in 2023] went up to 55%, which was one of the highest figures that we’ve reported since 2017.

[The recently published 2024 McKinsey Global Survey reported that AI adoption had risen this year to 72%.]

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There’s a lot of really exciting data that we feature in the report that talks about how AI is associated with more productive workers, with work of higher quality, and with workers that are able to get work done in less time. There’s also data that suggests companies that integrate AI see tangible revenue increases and tangible cost decreases. And there’s a lot of really compelling data that suggests that AI is really doing good things for businesses, and I would be unsurprised if we didn’t see more AI businesses adopt these kinds of technologies.

Big Think: If we do see greater adoption of AI, what do you think are some of the implications of this for the business world?

Maslej: I think there is an open question as to what effect AI is going to have. Is it going to lead to people losing their jobs? Is it going to lead to re-skilling within a company? When you look at data on how business managers are expecting AI is going to affect their organizations in the next three years, you see that a lot of them report saying that they expect that they’ll be decreasing the number of jobs. A substantially greater number of respondents anticipate decreases than increases. 

Nestor Maslej, research manager at Stanford HAI and editor-in-chief of HAI’s Artificial Intelligence Index Report.

Probably, you’re going to see a bit of both to different degrees, but I think the degree to which you see these changes is going to depend a lot on the decisions that policymakers and business leaders make. If AI makes you more productive, you could stay at the same productivity level. But you could also conceivably get to a higher level of productivity and do even more. So the question of which way to go here is going to be one that’s going to be left to businesses and policymakers to decide.

Big Think: Is there a disparity between where business leadership attitudes to AI compared to rank-and-file staff?

Maslej: One of the interesting trends that we profiled in the Index this year is public opinion on AI. [Market research company] Ipsos has done a survey for a few years where it asks respondents how optimistic they feel about AI, and what their perceptions are about the impact that AI is going to have. People with higher incomes seem to be much more bullish about AI than people with lower incomes. Similarly, people with higher education levels are also substantially more excited. 

People with higher incomes seem to be much more bullish about AI than people with lower incomes.

And when you look at questions regarding the impact that AI is going to have on current jobs and whether people feel AI is going to change how people do their jobs, the Index says decision makers and organizations seem to be much more likely to agree that AI is going to change the way jobs will be done, compared to people that are not decision makers.

So it definitely seems there’s a bit of a disparity. It’s hard to know how much of a difference there is on a quantitative level, but in a lot of public opinion surveys, one of the top fears people very often cite when it comes to AI, and why they’re nervous about it, is the fact that AI could potentially lead to the displacement of jobs, and that definitely is something that a lot of people think really critically about.

Big Think: One of the key points in the report is the potential for AI to bridge the skill gap between low- and high-skilled workers. What are the implications of that?

Maslej: You could have AI serving as a leveling force. A few studies gave one group of participants an AI tool and another group of participants no AI tool, and they compared their performance. In most of these studies, the groups that got AI improved the performance of both high- and low-skilled workers, but the absolute improvement was higher for lower skilled workers than it was for higher skilled workers, even though higher skilled workers still came up on top in the aggregate. 

If you look at the trends, the data does point to the fact that AI is a game-changer in business.

This suggests that the skill gap could potentially narrow, because AI is helping a lot of these lower-skilled workers get to levels that they weren’t necessarily able to before. So this can mean that companies could potentially do more with less. They could leverage lower-skilled workers and enable them to do more meaningful work.

But it suggests that higher-skilled workers still come with a premium and are still maintaining their relatively dominant position in the organizational hierarchy, in terms of what they can and cannot do.

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Big Think: Geopolitics is becoming increasingly fragmented, and AI is one technology that countries are keen to gain an advantage in. Could this splintering of technological progress and governance lead to new competitive pressures for international businesses as they use AI?

Maslej: One of the big things that now is going to change in comparison to how things were in the past, is the emergence of new regulatory regimes regarding AI. The way the United States regulates AI technology is a lot different than the way the EU regulates it. So a lot of businesses that are integrating these tools, especially if they operate in international contexts, really need to be aware of what these different regulatory regimes are.

And because the technology is so fresh, and a lot of the law is still to be written and still to perhaps be decided in the courts, businesses need to be proactively thinking about some of the different challenges that could emerge and some of the different regulatory hurdles they could run into. 

There are a lot of companies that are doing really well at the moment by handling AI regulatory compliance. If you’re a company with enough resources, you could get good AI models pretty much anywhere in the world, wherever you are. The question now is how do you use them in your business, and is that business use case compliant with the new laws that are emerging?

Big Think: Do you think there’s a risk businesses are rushing into AI adoption before enough is known about the impact it will have on the broader business world and the economy?

Maslej: It’s not really the Index’s position to say to what degree there is a risk, but I think it’s clear if you look at the trends, the data does point to the fact that AI is a game-changer in business. And businesses are always looking to save money, to make more money, and to do things more productively. So the data does point to the fact that businesses will be using AI more. 

It’s not enough to dive headfirst into integrating these tools. Companies need to be thinking very critically about how to do that integration in a responsible way.

I think businesses need to be mindful about how they’re using these tools and some of the consequences that could potentially arise. And that ties into the point that I made about regulatory compliance. Obviously, AI is a tool that could really accelerate the work that you do in your business, but it’s also a tool that, if misused, can come with different repercussions. 

Businesses, if they’re thinking about integrating AI tools, should not only be thinking about doing that integration, but also really be thinking about how to do that in a way that is responsible and elevates their business but doesn’t lead to any kind of trouble. Data that we have from businesses [in the third chapter, looking at responsible AI] does suggest that a lot of businesses are thinking about these responsibility dimensions. They’re just not necessarily acting on them as much as they are thinking about them.

It’s not enough to dive headfirst into integrating these tools. Companies need to be thinking very critically about how to do that integration in a responsible way, and also be mindful of what some of the longer term impacts might be of integrating AI tools.

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