Strategy

AI talk in earnings calls enters its Eras Tour era

Artificial intelligence announcements (Tim Cook’s version).
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· 4 min read

We hate to do this. We’ve reached peak Taylor Swift, (if you hear her name one more time it might physically destroy you), and yet—and yet—we need an Eras Tour analogy here.

Because, really, it helps to think about artificial intelligence discussions in earnings calls the same way Swift thinks about her precious albums: as eras, if you will.

Since last year’s rapid AI explosion, many companies fell into one of two camps: jumping the gun, touting AI capabilities before they were ready for prime time, or feeling perpetually behind, yet too wary of security risks to proceed further.

Now, companies are taking the more level-headed approach of an elder T.Swift, looking back at their former naivety with a knowing chuckle. That was just an era.

This time around, companies seem to know which era they’re in. Some are in their “Let Him (Tim) Cook” era. They’re investing in AI, they swear, but just give them a minute! Apple was the prime culprit here, which makes sense, given the company’s love of a surprise launch.

In the tech giant’s earnings call, CEO Tim Cook noted the company’s continued investment in “technologies that will shape the future.” He continued: “That includes artificial intelligence, where we continue to spend a tremendous amount of time and effort, and we’re excited to share the details of our ongoing work in that space later this year.”

Later in the call, when asked more directly about generative AI investments, Cook outlined the company’s general outlook: “Our MO, if you will, has always been to do work and then talk about work and not to get out in front of ourselves.”

Other companies, meanwhile, were ready to talk about the work. They’re in their “Here’s this cool thing, but stay excited because there are more cool things coming” era.

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That was the case in UPS’s earnings call, when CEO Carol Tomé highlighted the company’s AI efforts, like a pack-and-ship center in Kentucky that “leverages robotics, automation, machine learning, and artificial intelligence to streamline fulfillment operations.”

But she was careful to keep ’em coming back for more, T.Swift style: “When you think about the advent of generative AI and the applications inside of our business, we’re just getting started, and I’m really excited about what the future will mean in terms of driving productivity and as well as improving the customer experience,” Tomé said.

Finally, there were companies in their “This changes everything” era, like the educational support company Chegg, which provides homework help and online tutoring. Last year, the company said ChatGPT was dramatically impacting its business, particularly by slowing its new customer growth rate.

The company had no choice but to take AI as a challenge, and as of Q4 2023, Chegg’s team is now “navigating the complete reinvention of our company, leveraging the advancements in artificial intelligence, and making it core to everything that we do,” CEO Dan Rosensweig said in the company’s earnings call.

“In less than a year, we redesigned our entire user experience, developed our own large language models, launched automated answering, built [a] proprietary algorithm to optimize the quality and accuracy of our exclusive content, and we began to compete more aggressively for new customers around the world,” Rosensweig continued.

Chegg’s foray into AI hasn’t fully paid off yet, but the company knows where it stands. Rosensweig noted that the integration of “AI into every facet of Chegg’s platform is ongoing and iterative,” with the aim of building “a truly personalized learning assistant, a service that anticipates the student needs.”

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CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.