Good morning. Artificial intelligence continues to change the game of business, and this year companies are finding they can get lots of mileage out of tools that may never be 100-per-cent reliable. But while not every CEO is about to shed huge numbers of employees, they are definitely all thinking about AI. That’s in focus today, plus mapping U.S. tariffs around the world.
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In the news
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On our radar
- Conservative Leader Pierre Poilievre said any countertariffs imposed by Ottawa must be narrow in scope to limit the impact on Canadians
- After meeting with Prime Minster Mark Carney, leaders of three Métis organizations say they are optimistic that Ottawa will respect Indigenous rights with major projects legislation
- A defence review has strongly made the case that Ottawa should stick to a plan to buy F-35 jets, two sources familiar with the matter said
Canadian CEOs are embracing generative AI for its speed and efficiency, and expect employees to get on board – or else.Illustration by Kuba Ferenc
In focus
How Canadian CEOs are accelerating AI deployment
Hi, I’m Joe Castaldo. At the beginning of the year, I wrote a feature about how Canadian companies were adopting generative artificial intelligence. There was a lot of enthusiasm, but the actual efforts to implement AI were fairly tepid. Companies were experimenting with pilot projects while worrying about privacy, security, accuracy and employee education. They were also simply grappling with what to do with a new technology.
I did those interviews late last year. When my colleague Sean Silcoff and I started calling around more recently, we learned a lot has changed. Our feature out today shows how. Among more than a dozen CEOs and executives interviewed by the two of us, there has been a notable shift.
First, some tech CEOs are nervous. For them, AI is both an opportunity and an existential threat. They’re fretting about how a completely new company can grow fast with fewer employees and less funding than in the past thanks to AI coding tools – and then displace their own businesses. Jason Smith, the CEO of Vancouver tech company Klue, recently let go of 40 per cent of his employees because he believes he has to reinvent the company to compete in the AI age.
As part of a long term AI adaption strategy, Jason Smith, CEO and co-founder of Klue, announced mass layoffs in June.Kayla Isomura/The Globe and Mail
Anxious CEOs are pushing employees harder to use AI. The friendly nudges to experiment have been replaced with directives and mandates. Some have told employees they are expected to use AI daily and their usage will be evaluated in performance reviews. At Geotab, employees will be assigned an AI score. “We will replace people who are not using AI,” CEO Neil Cawse told us.
Executives also say they are starting to see productivity gains from AI tools and are thinking hard about how many employees they’ll need. Some of the tech companies we spoke with are growing revenue without adding any employees. League CEO Michael Serbinis told us there are some roles he doesn’t expect to hire for again. AlayaCare, meanwhile, is not currently hiring entry-level coders because of what can be done with AI tools, CEO Adrian Schauer said.
Does this mean we’re heading for a jobs apocalypse? That’s the contention of some high-profile AI developers. But as other experts told us, AI tools are available to everyone. A company trying to slash employees and cut costs risks getting crushed by a competitor that wants to use AI to grow faster and pursue more business opportunities, which just might require hiring more people or changing existing job roles. “If every job is made up of 100 tasks, those 100 tasks are not going to be the same in the future,” said Jodie Wallis, Manulife’s chief AI officer.
Among more than a dozen CEOs and executives interviewed by The Globe and Mail, there has been a notable shift this year in approaching AI.Illustration by Kuba Ferenc
There are still a few things holding generative AI back. While we heard less concern about accuracy and reliability this time around, it remains a problem that can limit usage. That helps explain why in the finance sector, for example, the majority of generative AI use cases are for employees, not customers who can create a PR headache when something goes wrong.
Some 80 per cent of companies are not seeing a significant bottom-line impact from AI, and 90 per cent of more sophisticated pilot projects get stuck in that phase, according to a report by McKinsey & Company.
Plus, trade-offs may be discovered in time. AI might be able to boost productivity, but it could also change how we work, and not necessarily for the best.
But our reporting shows that companies aren’t waiting around – and illustrates that, with AI, things can change unnervingly fast.
Let’s see where we end up in one more year. Or six months.
Mapped
Trump’s broad tariffs go into effect
The Globe and Mail
Trump began levying higher import taxes on dozens of countries yesterday, just as the economic fallout of his months-long tariff threats has begun to create visible damage for the American economy. Just after midnight, goods from more than 60 countries and the European Union became subject to tariff rates of 10 per cent or higher.
- Listen to The Decibel podcast: Why the absence of a U.S. trade deal might be a good thing
Bookmarked
On our reading list
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Morning update
Global shares were mixed as investors assessed corporate earnings and U.S. President Donald Trump’s nomination for the open spot on the Federal Reserve’s board. Wall Street futures were in positive territory, while TSX futures followed sentiment higher.
Overseas, the pan-European STOXX 600 was up 0.24 per cent in morning trading. Britain’s FTSE 100 was flat, Germany’s DAX declined 0.08 per cent and France’s CAC 40 advanced 0.23 per cent.
In Asia, Japan’s Nikkei closed 1.85 per cent higher, while Hong Kong’s Hang Seng slid 0.89 per cent.
The Canadian dollar traded at 72.84 U.S. cents.