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Grown-up AI conversations are finally happening, says expert Azeem Azhar
“The thing that’s surprised me most is how well CEOs are [now] articulating generative AI, this technology that’s only been public for a year or so,” Azhar says,” “I’ve never experienced that in my life and didn’t realize how quickly they’ve moved.”
Azhar and Bremmer also discuss the underlying technology that’s allowed generative AI tools like ChatGPT-4 to advance so quickly and where conversations about applications of artificial intelligence go from here. Whereas a year ago, experts were focused on the macro implications of existential risk, Azhar is excited this year to hear people focus on practical things like copyright and regulation—the small yet impactful things that move the economy and change how we live our lives.
Catch Azeem Azhar's full conversation with Ian Bremmer in next week's episode of GZERO World on US public television. Check local listings.
Mark Carney sees more problems than solutions emerge from Davos
Davos is a good place to recognize problems but not such a good place to solve them, according to Lord Mark Malloch Brown, a British politician and diplomat who was in the Swiss Alps this month. “A new generation of modest, listening and empathetic leaders is needed – the antithesis of Davos Man,” he tweeted.
The World Economic Forum has steered so far to the north of public opinion that it is now being used as a punchline – the New York Times noted that “the Davos Consensus” is now a counter-indicator of what is likely to happen. “Trump is already the president at Davos — which is a good thing because the Davos consensus is usually wrong,” said Alex Soros, son of George and chair of the Open Society Foundation, on a panel at this year’s forum.
Yet, there is a reason why 3,000 of the world’s most powerful people make the mid-winter trek to Switzerland every year and line up in the cold to pass through security outside the Grandhotel Belvédere: It’s valuable to understand what the global elite is thinking and to recognize the many problems the world is facing.
GZERO Media caught up with Mark Carney, former governor of the Bank of England and Bank of Canada, who now serves as chair of Brookfield Asset Management and Bloomberg Inc. (as well as acting as a UN special envoy on climate change), to hear what he picked up in Davos.
Economic optimism
On the global economy, the general feeling was of a resilient US economy contrasting with a stagnant Europe, particularly as Germany goes through a historical industrial restructuring moving away from a model built on cheap gas from Russia and exports to China.
The general outlook for China was bearish, with the downside of its ongoing real estate adjustment outweighing the boost from China’s growing competitiveness in electric vehicles and clean energy and its efforts to rebuild exports at a time when supply chains are being “de-risked.”
Premier Li Qiang told Davos that China’s economy is open for business, but Reuters reported that investors who attended a closed-door lunch with him remained skeptical about China’s charm offensive.
This points to more stimulus, Carney said. Indeed, Bloomberg reported last week that the Chinese government is considering a rescue package for slumping stock markets (the CSI 300 was down 11.4% last year, its third year of negative growth, while Hong Kong’s Hang Sen was down 14% in 2023).
On monetary policy, Carney said the expectation among many attendees was that interest rates have peaked but that there was only limited appreciation that the pace of reductions may be slower than the market has been pricing. During Davos, market expectations were that the Fed would begin cutting in March and then cut again another four or five times this year. But Carney believes the Fed will probably wait until June to begin cutting, followed by another one or two cuts this year. “However, if that’s because the US economy is stronger than expected, it would be net positive,” he said.
Global crises
Geopolitics weighed heavily in the Swiss Alps. While US-China relations appear to have stabilized in the short term, the Middle East conflict was widening alarmingly. Reuters reported that there were no practical advances on a Palestinian state, or even a cease-fire, at Davos.
The head of the Palestinian Investment Fund estimated that $15 billion would be needed just to rebuild houses in Gaza. Arab states said they would not fund reconstruction until there was a lasting peace, by which they meant a Palestinian state.
Yemeni and Iranian officials told Davos audiences the attacks in the Red Sea would not stop until Israel ended the war in Gaza. The CEO of oil giant Saudi Aramco warned that the world might see a shortage of oil tankers if the attacks continue, forcing shippers to choose longer alternative routes.
Bankers warned that increased shipping costs and the possibility of an oil price rise could prove inflationary. And attendees took note of the comments of Saudi Arabia’s Prince Turki al Faisal that “the present leadership of Hamas, the PLO, and of Israel should be excluded from any participation in any future political role.”
Good AI vs. Bad AI
AI was everywhere, with businesses focused on how to implement it, first in basic administration and more profoundly in re-engineering the production, sales, and marketing. The core question of whether workers will benefit — and when — was more hotly debated. Some, including the IMF, saw widespread disruption to jobs (up to 40% according to the Fund). The techno-optimists pointed to the ability of AI to re-skill workers rapidly and past experiences with major technological changes that belied the ‘lump of labor fallacy.”
Carney felt that AI would begin to have major impacts on productivity and growth by the end of the decade and that, history teaches, it would take a comprehensive response of business, government, and academia to ensure that workers share in the benefits.
Climate change
Coming less than two months after what was regarded as a business-heavy, successful COP28 in Dubai and with AI dominating much of the discussion, the climate change debate was relatively muted. But Carney said it would be a mistake to consider that the transition has been relegated down the agenda.
He said that it is now so core to the fundamental business model of most companies that it has become embedded as a driver of competitiveness.
Carney noted that five years ago, $500 billion was invested in the transition; last year, that number was $1.8 trillion, nearly double what was invested in oil and gas. The challenge is that this number needs to more than double again to about $4 trillion by the end of the decade.
He said that the transitions toward clean energy and AI actually work in tandem since, while AI is relatively capital-light, it requires a lot of data and computing power, which in turn requires clean energy. And AI solutions will help with optimizing grids, heating and cooling systems, and even supply chains.
It was noticeable that the backlash against Environmental, Social, and Corporate Governance, or ESG, meant it was rarely mentioned in Davos. Attendees like Canadian Deputy Prime Minister Chrystia Freeland were more focused on the new buzzwords – “supply chain resilience” – trying to convince investors that Canada has the critical minerals and clean energy they need, as businesses try to diversify sources away from China.
Sustainability is now about “resiliency building” that contributes to profitability, not just altruism.
Milei’s message
Javier Milei, the new Argentinian president, burst onto the main stage at Davos like an arsonist with a blowtorch, lambasting the proponents of state intervention and concluding with the rallying cry: “Long live freedom, damn it.” He said the Western world is facing a significant threat because its leaders have been co-opted by a worldview that leads to socialism and economic deprivation.
“We are here to tell you that collectivist experiments are never solutions to the problems that affect citizens. Trust me, no one is better than Argentina to provide testimony on this,” Milei said.
At the time of Milei’s inauguration, annual inflation stood at 143%, the currency had plunged, and four out of 10 Argentines were living in poverty. He has promised radical reforms, including deregulation and devaluation of the currency, and there was no evidence that he was prepared to dilute his agenda in his speech.
He was scathing about “neo-Marxists” who have “co-opted the common sense of the Western world” when it comes to the climate change agenda and said he considered all talk of “market failure” to be an oxymoron.
Carney has considerable experience in navigating market failures, having been in the Cash Room meeting in the US Treasury as Bank of Canada governor during the financial crisis, alongside other G7 finance ministers and central bankers, when the decision was reached to backstop the banking system with liquidity to prevent a repeat of the Great Depression.
“All ideologies are prone to extremism, and capitalism loses its sense of moderation when the belief in the power of the market enters the realm of faith,” he wrote in his book, “Values.” “There are no libertarians in a financial crisis.”
But he said he found Milei’s speech to be entertainingly provocative. “It was good theatre and raised some important issues,” he said, particularly his praise for entrepreneurs and his assertion that state control does not depend solely on owning the means of production but can include regulation. Carney noted, however, that Milei appeared oblivious that he was speaking to some of the world’s most successful entrepreneurs (such as Bill Gates), few of whose actions echo the “Atlas Shrugged” school of poverty elimination.
Carney concluded that, “where you stand depends on where you sit,” and that Milei’s vehemence was undoubtedly influenced by a long history of high levels of state intervention and indebtedness in Argentina.
After his speech, Milei sat down with International Monetary Fund Managing Director Kristalina Georgieva to discuss Argentina’s debt problems. He remained defiant: “Free enterprise capitalism is the only tool we have to end hunger and poverty,” he said.
Milei will have to face down entrenched opposition from those who rely upon rents from the state apparatus if he is to rid his country of the unwanted tag of the “Argentina paradox,” the world’s most glaring example of a developed economy that went backward.
Graphic Truth: Who's who at Davos
For one week, heads of state, business titans, and thought leaders gather in the Swiss Alps and discuss the world’s most pressing problems. With all of that money, political power, and intelligence in the same room, Davos is, in theory, the perfect place to get big things done.
But that’s not always the case. This year's Davos didn’t surmount tangible progress on climate change, the war in the Middle East, or any of the countless political issues that were on the table to be discussed. Overall, global politics took a backseat at the World Economic Forum. Could this be because political leaders were vastly outnumbered by CEOs? To find out, we looked at who was in the room where it (didn’t) happen.
A man and woman walk in front of the World Economic Forum Convention Center in Davos, Switzerland.
Hard Numbers: Women attendees in Davos, Talks on peace in Ukraine, Taxing extreme wealth, Rebuilding homes in Gaza
80: The ongoing war in Ukraine, which is nearly two years old, was a big topic in Davos this year. National security advisors from over 80 countries gathered in the Alpine ski town before the summit officially kicked off to discuss Kyiv's 10-point peace plan. Moscow has clearly been paying attention and dismissed meetings on Ukraine's peace formula as "pointless."
250: Over 250 millionaires and billionaires, including Disney heir Abigail Disney, lent their signatures to an open letter addressed to political leaders gathered in Davos, calling on them to do more to tax extreme wealth. "Our request is simple: We ask you to tax us, the very richest in society," the letter said.
15,000,000,000: The cost of rebuilding houses in Gaza will be at least $15 billion, the head of the Palestine Investment Fund said in Davos, as the Israel-Hamas war wreaks havoc on infrastructure across the coastal enclave. Chairman Mohammed Mustafa said it's estimated that around 350,000 housing units in Gaza have been completely or partially destroyed so far.The free world comes out swinging
As the Davos jet set arrived in the Swiss Alps earlier this week, the weather matched the mood: gloomy, with much to be gloomy about.
A barometer on global cooperation released by the World Economic Forum suggested that in almost every category – trade, innovation, health, and security – the picture is as turbulent as a brooding J.M.W. Turner seascape.
The study suggested cooperation is being eroded by conflict and competition from autocracies around the world. In the WEF’s Chief Economists Outlook, 56% of the respondents said they expect the global economy to weaken this year, in part because of geopolitical uncertainty.
Events in Ukraine, Gaza, and the Red Sea are precarious, and the Western response is half-hearted, appearing to confirm Russian President Vladimir Putin’s view that democracies are weak and hamstrung by the need to win votes.
Attendees in need of a pick-me-up may have lamented the decision not to repeat the experiment of micro-doses of mind-expanding magic mushrooms that were on offer last year.
Democracies strike back
Strangely though, the clouds cleared, literally and metaphorically, as the week progressed, and leader after leader took to the stage to proclaim their optimism about the world in 2024.
Maybe it is because Western politicians were in such close proximity to the new masters of the technology universe – AI pioneers like Open AI CEO Sam Altman – and their unshakeable confidence that we are on the cusp of a new era of tech-driven prosperity.
Maybe it’s because the global elite are simple people with simple tastes – the best of everything – and Davos is obliging them.
Whatever the explanation, there was a spring in the step of many of last week’s keynote speakers. The democracies were striking back, based on their faith in the resiliency of their systems and their belief in the shortcomings of their adversaries.
The feeling is in line with the conclusion of the aforementioned barometer – that cooperation can co-exist with elements of great power rivalry, and that instances of cooperation can build mutual trust.
Jake Sullivan, President Joe Biden’s national security adviser, said on Tuesday that we have entered a new complex reality of strategic competition in an age of interdependence. This will be an era that builds on the core institutions that have kept the peace since 1945, one where the existing rules – “that crime doesn’t pay” – remain in force, he said.
Rivalry with countries like China means “a small yard with high fences,” Sullivan said, to ensure that technology like advanced semiconductors is not used to undermine America's national security. But he said that does not mean a technology blockade, pointing to a carve-out on commercial chips.
And he said recent agreements, such as renewed military-to-military communications and moves to reduce the export of fentanyl from China that followed Biden’s meeting with Chinese President Xi Jinping at the APEC summit in San Francisco last November show cooperation remains possible.
China’s conciliatory signals
The large Chinese delegation in Davos was led by Premier Li Qiang, who gave his own speech on Tuesday. He sounded like someone more interested in securing a better deal for China in this new world order than in blowing it up. He said China is seeking to rebuild trust by safeguarding the multilateral trading system. Beijing is committed to a policy of opening up to foreign investment “and will open the door still wider,” he added, to keep fostering a “market-oriented, law-based and world-class business environment.”
Naturally, Chinese leaders who witnessed an outflow of foreign investment in the third quarter of last year would make conciliatory noises, particularly in a room filled with executives from Middle Eastern sovereign wealth funds.
But Xi will have noted the world’s response to Putin’s aggression and is likely all too conscious that China cannot further alienate its trading partners at a time when it faces economic challenges. Those range from its shaky property sector to high levels of government debt, and from a lack of consumer confidence to demographic challenges.
Sullivan said his job is to worry but that he remains optimistic. “The more others seek to undermine stability, the more it brings our partners together,” he said.
He explained that people around the world are more interested in improving their own lives than in any “imperial projects or ambitions.” He said the democratic model remains more attractive than one based on coercion or intimidation and that violent disruption will fail.
Consensus-building efforts
However, for that to happen, countries have to come together and work toward a common interest, such as stopping Houthi attacks on shipping in the Red Sea, he added.
It was a theme reiterated by French President Emmanuel Macron in his address to the forum on Wednesday. He said Davos is always a venue for a global conversation and this year it should be realistic but optimistic, noting that “decisions that can change things are within our hands.”
US Secretary of State Antony Blinken on Wednesday offered a riposte to the idea that Russia is winning in Ukraine because of Vladimir Putin’s limitless tolerance for casualties and the failure of sanctions to cripple the Russian economy. He said Russia is weaker militarily, economically, and diplomatically than when Putin invaded two years ago. “Europe has severed its energy dependency on Russia. Ukrainians are more united than they’ve ever been. NATO is stronger, is larger, and will be larger still in the coming weeks."
“Putin has already failed in what he set out to do. He set out to erase Ukraine from the map, to eliminate its independence, to subsume it into Russia. That has failed and it cannot, will not succeed,” he said.
As Sullivan noted, nothing in world politics is inevitable. The election of Donald Trump would significantly alter the geopolitical calculus, potentially ending military assistance to Ukraine, giving China free rein to meddle in the South China Sea, and sparking trade wars with even the closest US allies.
But this past week, at least, there seemed to be a feeling in the famed Alpine village that the advantage has shifted in favor of the free world.
Iranian Foreign Minister Hossein Amir-Abdollahian attends the 54th annual meeting of the World Economic Forum, in Davos, Switzerland, on Jan. 17, 2024.
Iranian diplomat shakes things up at Davos
The World Economic Forum has always been a big tent when it comes to its attendees. The Russians have participated in large numbers in the past, with oligarchs throwing the wildest parties, replete with caviar and vodka chasers served by throngs of young women calling themselves translators.
That all ended with the invasion of Ukraine – and the US, EU, and Swiss sanctions.
But the tradition of keeping Davos welcome to all-comers has continued with the appearance this week of Iran’s Foreign Minister Hossein Amir-Abdollahian. In an interview on Wednesday, he called Hamas a “liberation movement” while insisting that Iran does not agree with the murder of women and children. (Israel’s President Isaac Herzog had a different interpretation in his session on Thursday, calling Hamas “a platform of terror for Iran.”)
Amir-Abdollahian said that the crisis in the region by the “Axis of Resistance,” including skirmishes in the Red Sea, would stop if there was an end to “the genocide in Gaza.”
His appearance has upset Iranian dissidents, including Marih Alinejad, the Iranian-American journalist who was targeted for assassination in the US two years ago. An Iranian agent visited her home in Brooklyn in July 2022. He was stopped the same day by the New York Police Department and found to have an AK-47 in the trunk of his car. He was later charged, along with two others, for being part of a plot to assassinate Alinejad.
Alinejad – who spoke with Ian Bremmer on GZERO World about being targeted by Iran – took to X, formerly Twitter, this week, pointing out that she was in Davos as a speaker last year.
“This year, the WEF invited the foreign minister of the country who sent gangsters to America to kill me in my house in Brooklyn. Just as the Islamic Republic planned a vicious attack on Israel by its proxy, Hamas, fired missiles at the Kurdistan region of Iraq and plotted with the Houthis to disrupt global shipping. Whose side is the WEF on?”
The answer it seems is … its own. The forum’s prime directive appears to be to ensure the annual gathering in Davos is the preeminent place this side of the UN General Assembly where global decision-makers can interact and form personal relationships, even when they don’t agree.
Graphic Truth: Davos doomsdayers
The World Economic Forum asked 1,490 experts from the worlds of academia, business, and government, as well as the international community and civil society to assess the evolving global risk landscape.
These leaders hailed from 113 different countries and the results show a deteriorating global outlook over the next 10 years, with the number of people who responded that the “global catastrophic risks [are] looming” jumping from 3% over the next 2 years to 17% over the next 10.
But after a year of lethal conflicts from Gaza and Ukraine to Sudan, record-breaking heat, with both droughts and wildfires, and polarization on the rise, can you blame them for being worried?
A slogan related to Artificial Intelligence is displayed on a screen in the Intel pavilion during the 54th annual meeting of the World Economic Forum in Davos, Switzerland.
AI takes center stage at Davos
Artificial intelligence is a hot topic in Davos, Switzerland, this week, as government officials and industry leaders gather for the 54th edition of the World Economic Forum summit. There are more than 30 scheduled events about AI concerning jobs, healthcare, ethics, chips, and access.
Among the most "sought-after" attendees are AI executives, including OpenAI's Sam Altman, Inflection AI's Mustafa Suleyman, Google DeepMind's Lila Ibrahim, Cohere's Aidan Gomez, and Mistral AI's Florian Bressand. Altman, who will speak about the benefits and risks of AI on Thursday, gave a recent podcast interview with Microsoft founder Bill Gates, sharing his thoughts on AI regulation.
Altman said that he's interested in the idea of a "global regulatory body that looks at those super-powerful systems" – ones far more powerful than current models like GPT-4 – and suggested that the IAEA, the nuclear regulatory model, might be a good model. "This needs a global agency of some sort because of the potential for global impact.”