AI can outperform human executives but cannot essentially replace them, according to a new study.
Led by the University of Cambridge Judge Business School and reviewed by the Harvard Business Review, the study found that, while generative artificial intelligence could potentially “outperform” human CEOs, it was unable to deal with any unpredictable situations.
Held from February to July 2024, the study included 344 participants and simulate situations in which auto industry CEOs need to make difficult decisions. The situations were based on data such as car sales, market shifts and economic disruptors such as the COVID-19 pandemic.
With more than 500,000 possible decisions, the situations were run as if they were part of an overall larger game with the main objective being survival. In their conclusion, although GPT-40’s outperformed the human participants with better designs for lower costs, it tended to get fired faster because it suffered with black swan events such as the economy plummeting.
Researchers highlighted the need for more data for AI to be considered an accurate replacement for executives.
What happens when you replace a CEO with an AI chatbot? https://t.co/wuCkmH30nB
— Harvard Business Review (@HarvardBiz) September 27, 2024
“GPT-4o performed well in this experiment because it had access to rich data from the simulator. However, many companies don’t generate enough data in terms of velocity, volume, veracity, and variety,” said the researchers. “Building a robust data infrastructure is essential before bringing generative AI into the boardroom.”
The findings of the report come amidst an expected growth in the AI-market. The form of technology is expected to grow by approximately $64.9 billion throughout the span of four years, from 2024 to 2028.
This projected growth comes as more big-name companies continue to implement the tool in their day-to-day workings. Along with Amazon, Dell Technologies Inc., Hewlett Packard Enterprise Co., Microsoft Corp. and Qualcomm Inc. are expected to be the companies leading this increase in AI usage.
Although the AI market is expected to grow, a variety of issues still need to be addressed for its safe usage. Along with potential privacy risks in the form of data security breaches, there are concerns about its implementation cost.
Researchers are still expecting an increase in its usage, regardless of any remaining issues.
“Challenges include automation, conversational AI interactions via Intelligent Virtual Assistants and Chatbots, and Natural Language Processing, Speech Recognition, and Conversational AI interactions,” wrote researchers from Technavio. “Despite these challenges, AI platforms deliver business value through AI solutions and frameworks, improving operational efficiency, enhancing customer experience, and driving product innovation.”
