The Trial Balance is CFO’s weekly preview of stories, stats and events to help you prepare.
Part 1: Daron Acemoglu discusses AI hype
Over the weekend, MIT economics professor Daron Acemoglu joined CNBC to address the hype around the impact of AI on the U.S. economy in light of his research findings.
Q: What are one or two of the most over-exaggerated claims around AI?
Acemoglu: The ones that my research referred to are about the macroeconomic effects of AI — how much it’s going to increase productivity, how much it’s going to increase aggregate output.
The industry has some enormous estimates. Goldman Sachs, McKinsey Global Institute and some trade magazines expect one or two percentage points faster growth in U.S. GDP over the next 10 years or so — 2%, every year, faster growth, thanks to AI.
And that’s amazing. Because if we get something like that, our economy [will be] completely revolutionized. If you look at the industrialized world, the U.S. included, we’ve been in the middle of a period of relatively slow productivity growth. So that could be a real game changer.
I think those estimates are quite exaggerated. Because if you look at what the current models are capable of doing, the most reasonable thing to expect is that within the next 10 years, they’re going to do a little bit more of the same, which is to help workers and automate some jobs, but mostly in back office type things. It’s not going to change what you do. It’s not going to change what I do. It’s not going to change what blue collar workers, electricians and plumbers do, because it’s not it’s not been incorporated with robots or anything.
Q: How long does it take for truly transformative changes to take place?
Acemoglu:If you look at other big technologies, even the internet, it took quite a long time. It took electricity about 30 to 40 years to start spreading in earnest and changing the US manufacturing and the U.S. home consumption sector.
If generative AI does it in 20 years, I think that will be fast. But we have to be realistic about what it is that it can do. I think the jury’s still out. I am completely convinced that there are some impressive changes and there are some things that AI can really help us with, but it’s not going to suddenly revolutionize everything we do.
Part 2: The week ahead
This week, contributing editor Dave McCann will publish a story on a new report from EY that highlights nearly two-thirds of all IPOs in 2023 were done in Asia. The reasons for this, and how it impacts CFOs, are plenty. (7/16)
Also this week, reporter Adam Zaki will publish a Q&A with e.l.f. Cosmetics CFO Mandy Fields. Zaki and Fields discuss her experience across an array of industries, her role in supply chain management, the company’s interesting marketing tactics, her thoughts on the development of the CFO role and more. (7/18)
Here’s a list of important market events slated for the week ahead.
Monday, July 15
- Empire State manufacturing survey, July
- Fed Chairman Powell speaks
Tuesday, July 16
- U.S. retail sales, June
- Import price index, June
- Business inventories, May
- Home builder confidence index, July
Wednesday, July 17
- Housing starts, June
- Building permits, June
- Industrial production, June
- Fed Beige Book
Thursday, July 18
- Initial jobless claims, July 13
- Philadelphia Fed manufacturing survey, July
- U.S. leading economic indicators, June
Friday, July 19
- New York Fed President Williams speaks
- Atlanta Fed President Raphael Bostic speaks
Part 3: Upcoming CFO Peer Audit
This week, a new edition of the CFO Peer Audit series will be published. The question: have you provided any type of GenAI guidance to either your finance team specifically, all employees generally, both, or neither?
Finance leaders from DUDE Wipes, the City of Quincy, e.l.f. Cosmetics, the Portland Pickles, the DiLucci CPA firm and more share their takes. (7/19)
