IoT News – IoT Insights

IoT Analytics conducted a comprehensive keyword analysis based on a comprehensive dataset of approximately 75,000 earnings calls from major US-listed firms.

The Q2 2023 findings reveal key CEO-led discussions focused on three key themes: Generative AI Applications, Bank Challenges, and Economic Uncertainty. These influential themes have captivated boardrooms around the world, ultimately shaping future investment priorities for companies across a variety of industries.

key quote,

Philip Wegner, Principal Analyst, IoT Analytics, comments:

“CEOs are now discussing how their companies can use Generative AI applications. The discussion turned to the actual deployment of large language models.

key insights,

• According to the latest “What CEOs Talk About” report, three topics significantly increased earnings calls in Q2/2023: 1. AI and Generative AI, 2. Bank Troubles, and 3. Reshoring.
• The buzz around economic uncertainty, stability and supply chain disruptions has died down.

big picture

In the second quarter of 2023, economic uncertainty remains the hottest topic of discussion in boardrooms globally.

There was a significant drop in the number of CEOs discussing inflation, with only 50% mentioning the keyword (a 21% decrease from the previous quarter). Similarly, other related topics also saw a decrease in prominence, with only 33% (-13%) of CEOs discussing interest rates and only 18% (-15%) of all earnings calls mentioning the word “recession”. to be done. Q2/2023. Despite these minor shifts in focus on economic topics among CEOs, it is important to note that overall, economic uncertainty remains a major concern in boardrooms.

Key CEO quotes on the macro environment:

“We expect macro-adverse conditions to continue, with the potential for a recessionary environment in both the US and Europe.” – Ian Broaden – Executive Vice President and Chief Financial Officer, McDonald’s, May 2, 2023

major upcoming themes

(Generative) AI

Generative AI Discussions are increasingly focused on particular use cases and applications.
The last quarter saw a remarkable +129% increase in mentions of generative AI, with 6% of discussions specifically referencing it. Additionally, the broad topic of AI was discussed in 21% of earnings calls (+21%), while the more technical term, “large language model” (LLM), saw a 229% increase in mentions, and was present in 1% Was. Of all the earnings calls.

banks

CEOs discussed banks more frequently in the second quarter of 2023 (+36%). The companies discussed possible fallout, as well as tighter lending rules from some (regional) banks, following the banking turmoil involving several institutions including Silicon Valley Bank (SVB) and Credit Suisse in the first quarter of 2023.

Quotes of Chief CEOs on Banks:

“We have seen many banks withdraw from auto lending, which is a hallmark of banks going through tough markets, and this has created a bit of pricing opportunity for us, as well as improving share-financing share for us. Has happened. , – Marion Harris – CEO, Ford Motor Company Credit Company, May 02, 2023

resuscitation

There was a +30% increase in buzz about reshoring in the second quarter of 2023. 1.3% of all companies and 5% of industrial companies spoke on this topic. Given the ongoing tensions between China and the United States, many US-based companies appear to be prioritizing increasing the flexibility of their supply chains, and some have concluded that the solution is to bring production closer to home.

Key CEO’s Quotes on Recharge:

“Reshoring continues to be a trending topic among our clients, and we expect to benefit from this trend in the near and long term.” – Frank Dellaquilla – CFO, Emerson Electric Company, May 03, 2023

declining subject

sustainability and climate change

Despite record temperatures around the world (for example, temperatures in the North Atlantic Ocean rose to record highs), discussions on climate (-16%), emissions (-25%) and sustainability (-17%) in Q2/2023 A decline was observed. ,

supply chain disruption

With supply chains gradually improving and supply shortages reducing, discussions about supply chains in general (-19%) and supply chain disruptions in particular (-54%) gain momentum in Q2 2023 There is a shortage.

Delve deeper into selected topics

#1 (Generative) AI

The release of ChatGPT by OpenAI in November 2022 triggered an unprecedented discussion about the use cases of Generative AI in the boardroom. Generative AI was mentioned by 6% of all CEOs in Q2/2023 – a significant increase of +129% compared to the previous quarter. Discussions have shifted from specifically discussing the ChatGPT tool (3.7% growth in the second quarter, a 28% increase) to actual enterprise-wide applications of generative AI. In addition, a growing number of CEOs also delved deeper into technical details: the keyword LLM (large language model, the foundation of ChatGPT) was discussed by 1%, representing a substantial increase of +229% over the previous quarter .

In Q2/2023, many companies start rolling out Generative AI as part of their core product. For example, online flower shop 1-800-flowers.com launched Momverse, an AI-powered poetry tool, to help individuals express their love for moms on Mother’s Day. E-commerce giant eBay has also started using generative AI to support its marketplace sellers in writing appropriate product descriptions. Lastly, travel company Booking Holdings has launched ChatGPT as a virtual travel assistant. These are just three examples of companies that are incorporating generic AI into their businesses.

Unsurprisingly, the companies that talked the most about generative AI in Q2/2023 were from the technology sector (22.2% of all tech earnings calls) and communications services (22.1%). Consumer cyclical (3.7%), consumer defensive (3.4%) and industrial (2.8%) also had their fair share of the debate.

When it comes to the various generic AI and LLM tools mentioned during these calls, OpenAI clearly dominates the field. OpenAI’s ChatGPT has over ~99% of mentions among generative AI tools. Other tools such as Google’s Bard, META’s LLaMA or Aleph Alpha were mentioned only sporadically as examples.

Quotes from prominent CEOs on generative AI:

“With the emergence of Generative AI capabilities, we moved quickly to create a fun and playful way to combine emerging AI technology with our gifting experience. Just in time for Mother’s Day, we launched Momverse, 1-800-Flowers. – Chris McCann – Chief Executive Officer, 1-800-flowers.com, May 11, 2023

“Generative AI has many exciting use cases beyond description, and we are exploring many potential applications in our marketplace that can enable truly magical customer experiences.” – Jamie Iannone – CEO, eBay Inc., April 26, 2023

“There are challenges as the current LLMs sometimes give wrong outputs. Still, we’re excited to learn how we can use these technologies for the benefit of our customers. Some of our brands, such as Kayak and OpenTable, are using Regenerative AI plug-ins, while others are creating ways to integrate the technology into their offerings. – Glenn Fogel – President and Chief Executive Officer, Booking Holdings, May 4, 2023

“We are in the advanced stages of implementing generative AI across our portfolio, and we are working closely with other vendors as an early release partner for OpenAI. We plan to announce new disruptive AI use cases. – Christian Klein – CEO, SAP SE, 21 Apr 2023

#2 Supply Chain

Long lead times and strained supply chains have been a constant concern for CEOs. We previously highlighted supply chain disruptions as a prevalent topic of discussion, such as in our Q4 2022 analysis, or Q3 2021 analysis.

In the second quarter of 2023, supply chain disruptions were mentioned in 4% of all earnings calls. This is a decrease of -54% compared to the first quarter of 2023. The tone of these discussions has changed, as many companies now discuss how they have successfully overcome these disruptions and managed the challenges. Although the Global Supply Chain Stress Index is back to pre-pandemic levels, not all earnings calls reflect that sentiment, with some companies still struggling longer than desired.

Quotes from key CEOs on supply chain:

“We have now seen that supply chain disruption has normalized, and we will see inventory levels really come down in the third quarter of this year.” – Yves Muller – Hugo Boss AG, May 4, 2023

“The last 2 or 3 years have seen extreme volatility in inventory, given the supply chain disruption that all of us in the industry have faced. I think we’re seeing more normalized business inventory levels now. And as we see across the board, most business inventory levels were largely normalized in Q1. – Mark Bitzer – Chairman and Chief Executive Officer, Whirlpool Corporation, April 25, 2023

“In a context where supply chain liquidity has not yet been fully restored, our inventories will remain high throughout the year to maintain our agility.” – Antonio Picca Piccon – Chief Financial Officer, Ferrari NV, May 4, 2023

#3 Climate Change

In 2023, global temperatures are projected to rise 1.1 °C above pre-industrial levels, and news related to climate-related disasters regularly make headlines (for example, major floods in Pakistan, record heat in the North Atlantic or western Mediterranean severe drought in

Our analysis shows that there is a significant increase in discussions related to climate and sustainability during earnings calls from Q1 2019 to Q1 2021. However, since then, the prevalence of these subjects has decreased or even declined slightly. In the second quarter of 2023, 20% of CEOs discussed sustainability (-17% compared to the previous quarter), and 11% focused on climate (-16%) during their earnings calls.

The emphasis on economic uncertainty and AI use cases seems to have sidelined the sustainability and climate topic. For example, Amazon recently quietly dropped parts of its climate pledge. Additionally, several companies, including Yamaha (as seen below), have admitted to falling short of their previously set targets.

One positive thing is that many vendors offering sustainability-related products are experiencing significant adoption. For example, Microsoft and Siemens highlight significant customer demand for sustainability-related products.

Quotes from key CEOs on climate and sustainability:

“Our Cloud for Sustainability is being strongly adopted by companies across every industry including the BBC, Nissan and TCL as they meet their respective environmental commitments.” – Satya Nadella – President and CEO, Microsoft Corporation, April 25, 2023

“We are well positioned with automation and digitization and, in particular, with the sustainability offering we have in place for our customers to help them transition to their business models.” – Ralf Thomas – CFO, Siemens AG, May 17, 2023

“As far as sustainability efforts are concerned, indeed, we have made more progress in some areas, but the change in model mix has affected the proportion of sustainable wood usage. Therefore, we haven’t yet obtained much numerical results worth mentioning.” – Takuya Nakata, CEO, Yamaha Corporation, May 9, 2023

, about analysis,
The analysis highlighted in this article presents results from research by IoT Analytics that included Q2/2023 earnings calls from ~4,000 US-listed companies. The resulting visualization is indicative of the digital and related topics that CEOs prioritized in Q1/2023. The chart shows the importance and growth of keywords.
X-axis: Keyword importance (i.e., how many companies mentioned the keyword in the earnings call in Q2) – The higher the keyword falls on the x-axis, the more often the topic is mentioned.
shaft: keyword growth (i.e., increase or decrease in mentions from Q1/2023 to Q2/2023) – a higher number on the y-axis indicated that the topic has gained importance, while a negative number indicated a decrease in importance Have given.