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UBS chief Sergio Ermotti has warned against over-enthusiastic predictions about the pace at which the world is likely to be changed by developments in artificial intelligence, despite acknowledging the technology will likely change the world faster than any rival innovation in history.
Speaking at the World Economic Forum in Davos, the Swiss CEO cautioned that the changes brought about by AI will likely be slower than the most optimistic forecast might suggest, as he argued shifts are likely to be gradual due to the regulations imposed on the banking sector.
“Let’s not exaggerate on how fast it’s gonna change the system. It’s gonna be an evolution, it’s not gonna be a revolution… because we have to be very prudent on how we do it.,” Ermotti told a panel called “Are Banks Ready for the Future?”
The UBS
UBS,
CEO, however, acknowledged that AI will likely change the world more than any rival technology in the past as he argued banks are set to be at the forefront of this change as major embracers of technology over the past 30-40 years.
“I do believe that AI will be transformational faster than any other trends we saw in the past,” Ermotti said.
Ermotti added that AI could also be useful in addressing labor shortfalls caused by the demographic crises being faced by major economies worldwide but he played down the negative impacts of the technology on jobs.
“We talk about a lot of jobs being eliminated, but we are also facing in many countries around the world, demographic trends and immigration trends that are forcing us to look for talents, and being able to replace some of those missing talents through efficiency and effectiveness, is also positive things for society,” Ermotti said.
Global fertility rates have fallen sharply since the mid-20th century, in a trend that has seen rates fall well below the levels required to keep populations stable in major economies including South Korea, China, and Japan.
Ermotti’s comments come as analysts are now saying the hype around AI, that caused stock markets to rally in 2023, is now set to drop off over the coming year, in a shift that will force AI companies to prove the real-world uses of their technology.
In a report from Deutsche Bank published on Wednesday, analysts led by Adrian Cox and Galina Pozdnyakova pointed to data showing mentions of AI in corporate earnings calls started to drop off in the fourth quarter of 2023, in a sign the hype around AI has started to dissipate.
The drop off followed a sharp uptick in mentions of AI that started in the first quarter of 2023, shortly after the launch of Chat GPT in November 2022, which peaked in the third quarter of 2023.
Ermotti was hired as the new UBS CEO in April 2023, following its acquisition of rival Credit Suisse, having previously served as head of UBS from 2011 to 2020 in the wake of the bank’s ‘Rogue Trader Scandal’.
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