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What CEOs talked about in Q3/2023

Sed ut perspiciatis unde. This analysis is based on a comprehensive dataset of Q3 2023 Earnings Calls from 4,000+ leading US-listed firms. The findings from Q3 2023 show that three pivotal themes are currently trending in CEO discussions: 1. AI and Generative AI, 2. AI chips, and 3. sustainability. These influential topics have captivated boardrooms worldwide and are shaping the future investment priorities for companies across various industries. KEY INSIGHTS:KEY QUOTES:In Q3 2023, topics related to economic worries remained prominent in boardroom discussions globally but continued to decline quarter-over-quarter (QoQ). Mentions of the most talked about topic, inflation, dropped 5% QoQ to 47% of calls. Supply chain worries saw the smallest drop, 2% QoQ, while recession experienced the largest drop of 38% QoQ, now appearing in 11% of earnings calls.Key quote on the macro environment: “Our base case today assumes a mild recession.” – Mark Mason, CFO, Citigroup, July 14, 2023AI : In Q3 2023,the broader topic of AI rose fairly steeply to 29% (+37% QoQ), and its subfield generative AI continued to rise in importance to 10% (+56% QoQ). During their quarterly earnings calls, CEOs appeared to be separating AI and many of its subfield topics from discussions about ChatGPT, which declined this QoQ (as discussed below in “Declining themes”).Our analysis also shows a marked incline in the mentions of AI strategy and AI infrastructure, rising 128% and 103% QoQ, respectively.Key CEO quote on generative AI: “Generative AI is at the forefront of customer conversations. However, enterprises are also realizing that they cannot have an AI strategy without a data strategy to base it on.” – Frank Slootman – CEO, Snowflake, August 23, 2023AI chips : Mentions of GPUs greatly outpaced mentions of CPUs, with the former climbing 102% QoQ to 2.8% in Q3 2023 earnings calls and the latter climbing 47% QoQ to 1.7%. Coinciding with this trend is GPU chipmaker Nvidia climbing 146% in mentions to 1.9% compared to Intel only climbing to 1.2% (+48% QoQ) and AMD to 0.8% (+11% QoQ) in reference to AI chips.“We’ll actually take the Nvidia hardware as fast as Nvidia will deliver it to us. Tremendous, tremendous respect for Jensen and Nvidia. They’ve done an incredible job. And frankly, I don’t know if they could deliver us enough GPUs.” – Elon Musk – CEO, Tesla, July 19, 2023Sustainability, energy transition, and renewable energy : Mentions of sustainability, energy transition,and renewable energy slightly rebounded to 21.4% (+9.2% QoQ), 5.3% (+15.4% QoQ), and 5.2% (+10.9% QoQ), respectively. These topics are lower than their peaks in Q1 2022; however, since Q3 2022, each topic has remained generally consistent in its percentage of earnings call mentions.“We don’t talk a lot about grid … but increasingly here in the U.S., people appreciate how critical grid modernization will be to the energy transition.” – Larry Culp – CEO, General Electric, August 28, 2023ChatGPT: As mentioned, ChatGPT experienced a decline in its number of mentions in the earnings reports, dropping 34% QoQ to 2.5%. Last quarter, we saw a transition from CEOs specifically discussing ChatGPT to them discussing enterprise-wide applications of generative AI. That transition still appears to be occurring, as the other AI topics saw significant rises in mentions:Remote work: The topic of remote work dropped the most of the key topics we tracked, falling 48% QoQ to 0.5% of earnings calls. This decline comes amid new concerns of a COVID-19 infection surge due to a newly detected SARS-CoV-2 variant. Early studies show that antibodies from vaccinations and past infections may enable immune systems to detect and combat the variant sufficiently, which could be easing boardroom concerns of a significant surge (of note, mentions of Corona dropped 8% QoQ to 0.9% of earnings calls).This decline in discussions around remote work also comes amid increasing so-called return-to-office mandates, with 90% of US companies expected to require employees to work in person at least a few days a week by the end of 2023.In the first quarter of this year, ChatGPT was the hot new (AI) topic for CEOs. In Q2, generative AI shared the stage with ChatGPT as AI proponents discussed other generative LLMs. Now, in Q3, ChatGPT is no longer the hot topic, but rather, generative AI, AI strategy, AI infrastructure, and AI Chips—with companies realizing that ChatGPT is just one tool of many in the new AI portfolio. However, AI is an evolving topic, and OpenAI continues to conduct research and development into ChatGPT, so there is no reason to suspect ChatGPT will completely fade from discussions in the near term.AI use cases like coding and chatbots are starting to climbAI use cases like coding and chatbots are also starting to climb, but they have not yet reached the same level as the aforementioned topics. These use cases will likely roll out in the next 6–12 months, so we assess these (and other) topics to grow in Q4 and into 2024.Of the AI umbrella (not counting AI chips, which we dive into more below), generative AI was the most talked about by CEOs. LLMs, AI infrastructure, and AI strategy saw significant rises in discussions, though they only appear within 1%–2% of the earnings reports overall.Technology and communication services sectors lead in AI discussionsThe technology and communication services sectors lead most AI and AI subfield discussions. 67.6% of technology sector earnings calls mentioned the general topic of AI, while 50.8% of the communications services sector earnings calls discussed it. Generative AI was also fairly high for both sectors, with it mentioned in 33.9% of technology sector earnings calls and 24.2% in communications services sector calls. Of note, the industrial sector showed the third highest interest in generative AI, with 6% of their earnings calls mentioning the topic.Coinciding with the topic of AI and subfields is a rise in AI strategy and infrastructure discussions. Though hovering between 0.5% and 1% of earnings calls, they rose 128% and 103%, respectively. This could be a sign that as companies look to AI to increase productivity and assess future investments, they are also considering AI implementation strategies.Key CEO quotes on AI and its subfields“Generative AI really [instantiated] AI in software, which means developers play a bigger role rather than data scientists. And that’s where you really see the business impact, and I think that impact will be large over the next three to five years…” – Dev Ittycheria – CEO, MongoDB, September 01, 2023“The application of AI has both horizontal and vertical components. Horizontal is building out the AI infrastructure.” – Anirudh Devgan – CEO, Cadence, July 24, 2023Also coinciding with the rise in AI discussions are GPUs, most noteworthy Nvidia, the leading GPU vendor in the market. While general discussions of GPUs rose approximately 102% QoQ to 2.8% of earnings calls, Nvidia rose 146% QoQ to 1.9%. On the chipset front, CPUs only saw a 47% climb QoQ to 1.7% of earnings calls. Meanwhile, on the vendor front, Intel saw a decent climb in discussions (~48% QoQ), and AMD a subtle climb (~10% QoQ).GPUs are becoming the core of choice for AI applications largely due to their architectural advantages over CPUs. While CPUs are optimized for task switching and fast sequential execution with only a few, large cores, GPUs often have many more, smaller cores designed for parallel processing. Deep learning involves performing many mathematical operations, including floating-point arithmetic (often used in rendering graphics) simultaneously, making GPUs a natural fit.GPUs also offer better cost efficiency for scaling. Though more expensive than CPUs, the time savings they offer for training large language models can more than compensate for that cost. Given that the race is on for AI market dominance, time can actually be money in this case.Key CEO quotes on AI chips“I think you can look at 2023 as really a year of planning for AI, because as I said, there’s tons and tons of GPUs being purchased.” – Jayshree Ullal – CEO, Arista Networks, July 31, 2023Since their peaks in Q1 2022, the rate of discussions of sustainability, emissions, energy transition, and renewable energy in earnings calls have remained generally consistent each quarter, with each topic generally ticking up and down QoQ. This consistency signals a continued awareness of climate impact considerations in the sectors without it being a growing discussion topic in general.That said, our analysis showed a general trend of CEOs emphasizing real-world projects for energy transition and renewable energy. It is worth highlighting that this emphasis comes amid a year (even quarter) of record temperatures. The US National Oceanic and Atmospheric Administration (NOAA) found that July 2023 had the warmest monthly sea surface temperature of any month and declared August 2023 the warmest August since NOAA started keeping global climate records 174 years ago.Basic materials, utilities sectors and EMEA companies lead discussions on sustainabilityThe basic materials and utilities sectors led the discussions on sustainability—45.7% and 40.9% of their respective earnings calls—with utilities taking the general lead in discussions of emissions, climate, batteries, and renewable energy (including solar power). Of note, the energy sector had the second-highest mentions of emissions (39.3%) and the fourth-highest mentions of sustainability (30.8%).By region, our analysis showed that European, Middle Eastern, and African (EMEA) companies talked about sustainability the most in Q3 2023, with mentions rising approximately 17% QoQ to 38.5%. Meanwhile, Asia-Pacific (APAC) companies continued to increase their number of mentions over North American companies—the former reaching 28.1% in Q3 2023 while the latter remained stagnant around 17%.Key CEO quotes on sustainability, energy transition, and renewable energy“The main areas of investment will be in generative AI, next-generation social infrastructure, and renewable energy.” – Junichi Miyakawa – CEO, SoftBank, August 06, 2023“The downturn in the global economy is not—across the board—even, and consequently, there [is] still a lot of capital being moved […] And it holds for the energy transition, which is almost a given that we have to move forward one way or another.” – Tom Erixon – CEO, Alfa Laval Corporate AB, July 20, 20235 things CEOs should ask themselves based on findings in this report:There is an opportunity for employees, service providers and other stakeholders to help CEOs excel at the topics they care about. Here are 5 questions those people serving CEOs could ask themselves based on findings in this report:| About the analysisThe analysis highlighted in this article presents the results of IoT Analytics’ research involving the Q3 2023 earnings calls of ~4,000 US-listed companies. The resulting visualization is an indication of the digital and related topics that CEOs prioritized in Q3 2023. The chart visualizes keyword importance and growth.X-axis: Keyword importance (i.e., how many companies mentioned the keyword in earnings calls in Q3 2023)—the further right the keyword falls on the x-axis, the more often the topic was mentioned.Y-axis: Keyword growth (i.e., the increase or decrease in mentions from Q2 2023 to Q3 2023)—a higher number on the y-axis indicated that the topic had gained importance, while a negative number indicated decreased importance.Source link Save my name, email, and website in this browser for the next time I comment.By using this form you agree with the storage and handling of your data. * Δdocument.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() );Tech dedicated news site to equip you with all tech related stuff.I agree that my submitted data is being collected and stored.✉️ Send us an emailTechToday © 2023. 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What CEOs talked about in Q3/2023

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