Roy Bahat is head of Bloomberg Beta, a venture capital fund investing in artificial intelligence (AI)-based solutions to reshape the workplace and global markets. Global Finance sat virtually with Bahat to discuss AI, the future of work and venture investing.
Global Finance: What are the biggest mistakes you see companies make with respect to artificial intelligence (AI)?
Roy Bahat: In general, the biggest mistake is assuming that this is white-lab-coat science from the future and you need scientists to explain it. The vast majority of corporations don’t really need a dedicated AI team, because the problems they have should be solvable by relatively straightforward techniques—or not at all. So the biggest mistake is blowing lots of money on a sci-fi vision of the future when really what you need is more meat-and-potatoes AI. Because it’s easier to take a separate project and give it some money and say it’s high profile than it is to make the real kinds of changes that technology requires, companies tend to do that. They blow a lot of money.
The thing I would ask before any company embarks on any advanced AI project is: What have you used data in order to enable in your business lately? AI delivers most value where the data is enormous and structured. If your internal corporate databases are not organized enough for you to do basic data analysis, then the chance that you’ll be able to do any AI is roughly zero. You want to start basic, and it’s really a walk-before-you-run scenario.
GF: How can finance leaders prepare themselves for the AI era?
Bahat: The best way to get familiar [with AI] is to start it within your own function—that could mean, depending on what industry you’re in, revenue prediction and forecasting tools or expense auditing, for example. That way they can become experts in the organization, internalize some of the benefits. Many people in senior finance leadership roles want and struggle to get a seat at the table on broader business decisions. If they develop this expertise, which otherwise would be developed by the CMO or by the head of sales, then they can be the strategic executives that companies need for the future.
GF: What will the long-term impact of Covid-19 be on tech and AI?
Bahat: This pandemic is unprecedented, including supply and demand shocks and challenges to fundamentals of economics. Downturns like Covid-19 always bring acceleration of tech and also remove barriers to innovation. Several tech solutions will solve the supply challenges, as not enough people are available to conduct the work for health reasons.
Also, culture does matter, and Covid-19 will define the corporate values of our tech institutions. The pandemic shows that the workplace does not differentiate between hard and soft skills, and modern business always requires soft skills, such as inclusion and leadership, on all corporate levels. Finally, with respect to Covid-19’s impact on the investment process in tech and AI, not much has changed, but corporations have changed their priorities, such as fighting racism, as the health crisis exposed other injustices.
GF: What is the role of AI in the public sector and the future of work there?
Bahat: Governments have a lot of data and are the beneficiaries of AI. Using AI for judicial or military applications, though, should be sensitive and not be fast. The biggest challenge for governments is losing tech talent to the private sector. A winning formula for tech integration would include quality of life and freedoms together with a culture of embracing tech. In some countries, the government is the largest tech investor in the economy.
Global Finance: What are the biggest mistakes you see companies make with respect to AI?
Roy Bahat: In general, the biggest mistake is assuming that this is white-lab-coat science from the future and you need scientists to explain it. The vast majority of corporations don’t really need a dedicated AI team, because the problems they have should be solvable by relatively straightforward techniques—or not at all. So the biggest mistake is blowing lots of money on a sci-fi vision of the future when really what you need is more meat-and-potatoes AI. Because it’s easier to take a separate project and give it some money and say it’s high profile than it is to make the real kinds of changes that technology requires, companies tend to do that. They blow a lot of money.
The thing I would ask before any company embarks on any advanced AI project is: What have you used data in order to enable in your business lately? AI delivers most value where the data is enormous and structured. If your internal corporate databases are not organized enough for you to do basic data analysis, then the chance that you’ll be able to do any AI is roughly zero. You want to start basic, and it’s really a walk-before-you-run scenario.
GF: How can finance leaders prepare themselves for the AI era?
Bahat: The best way to get familiar [with AI] is to start it within your own function—that could mean, depending on what industry you’re in, revenue prediction and forecasting tools or expense auditing, for example. That way they can become experts in the organization, internalize some of the benefits. Many people in senior finance leadership roles want and struggle to get a seat at the table on broader business decisions. If they develop this expertise, which otherwise would be developed by the CMO or by the head of sales, then they can be the strategic executives that companies need for the future.
GF: What will the long-term impact of Covid-19 be on tech and AI?
Bahat: This pandemic is unprecedented, including supply and demand shocks and challenges to fundamentals of economics. Downturns like Covid-19 always bring acceleration of tech and also remove barriers to innovation. Several tech solutions will solve the supply challenges, as not enough people are available to conduct the work for health reasons.
Also, culture does matter, and Covid-19 will define the corporate values of our tech institutions. The pandemic shows that the workplace does not differentiate between hard and soft skills, and modern business always requires soft skills, such as inclusion and leadership, on all corporate levels. Finally, with respect to Covid-19’s impact on the investment process in tech and AI, not much has changed, but corporations have changed their priorities, such as fighting racism, as the health crisis exposed other injustices.
GF: What is the role of AI in the public sector and the future of work there?
Bahat: Governments have a lot of data and are the beneficiaries of AI. Using AI for judicial or military applications, though, should be sensitive and not be fast. The biggest challenge for governments is losing tech talent to the private sector. A winning formula for tech integration would include quality of life and freedoms together with a culture of embracing tech. In some countries, the government is the largest tech investor in the economy.
