DIGITAL STORM weekly #8

Welcome back to “The Digital STORM weekly” for executives, decision makers, industry leaders and all others which want to grow. (Total reading 10 min.)

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in todays rundown…

• Digital Transformation (Sourcing)
• Generative AI (AI surpass electricity - AI & Pink Floyd - AI Salaries - AI Governance - Prompts & Tools)
• Misc (Big Headlines)

Digital Transformation

Sourcing - The Potential of Generative AI in the IT Sourcing Process

(R. FUCHS)1 In newsletter 7 it has been highlighted, that Generative AI enables a high automation potential to compare provider offers with industry-specific requirements. However, this is only part of the entire IT sourcing process. Generative AI has a much greater potential to shorten the entire sourcing process. There are a great many guides on compliance in IT sourcing projects and on the implementation of legal framework conditions, such as those published by BITKOM (Bundesverband Informationswirtschaft, Telekommunikation und neue Medien e.V.).

In accordance with BITKOM, a sourcing project is usually divided into:

1. 1The preparation and planning phase, which includes the analysis of the initial situation, the definition of objectives and the determination of the further procedure.
2. The initiation phase with RFI/RFP and provider assessment.
3. Provider evaluation and negotiation.
4. The implementation phase with the transfer of the area to be outsourced and the establishment of operations (transition or service take-on) and finally.
5. The actual operation

Even though there is now more recent experience for this definition, the following chart shows an assessment of the potential of Generative AI in the sourcing process:

For operations, Generative AI offers great opportunities for both customers and providers. With reference to my sourcing article in the DIGITAL Storm Report # 5. By automating routine tasks in ITIL Processes, e.g., in incident management and data-driven insights. Generative AI frees up valuable human resources. Full potential of Generative AI into the actual operation will be on the agenda at DIGITAL STORM weekly # 9.

Generative AI

AI could surpass electricity, according to a Goldman Sachs report.

(Dr. STORM)2 AI has no shortage of audacious predictions. But Goldman Sachs recently raised the bar. According to a recent Goldman Sachs analysis, AI may affect GDP more than computers and electricity combined.

The report's authors predict that investments in AI might amount to more than 2% of US GDP, and they also predict that AI "could boost global labor productivity by more than 1 percentage point a year in the decade following widespread usage." Goldman Sachs had previously predicted that AI could boost the global GDP by 7% earlier in April.

AI generates Pink Floyd song from brain waves

(Dr. STORM) Scientists have managed to reconstruct a Pink Floyd song using artificial intelligence by decoding the brain waves of people who listened to the song.

The key points in a nutshell:

Original intent and long-term vision: The motivation for this study was to better understand how sounds are processed in the brain to help people with speech disabilities.

Uncovering the complexity of hearing: When listening to music, a seemingly simple task, complicated neural processes take place. The electrodes show how different parts of the brain decode the individual elements of a song.

Possible medical applications: This breakthrough could revolutionise medical treatments, particularly the development of more expressive speech output devices, and even enable the composition of music through thought..

900.000 USD for an AI expert

(Dr. STORM) The salary ranges for AI experts are wild, as the US made it compulsory for companies to post salary indications, allowing tech companies to find a solution. Meta , for example, has directors earning between $2M and $4M, which is still higher than the product manager posting from Netflix. This is similar to the rise in demand for AI skills in the past decade, with companies realizing the potential for significant profits.

However, most people are missing a key element in this AI hype: integrating generative AI into a product doesn't require top-notch AI skills. Companies can create compelling products around generative AI features by integrating technology that someone else has built. The skills required for this integration are traditional software skills with some additional AI-specific knowledge that can be developed in a short time.

In summary, the AI revolution will be created by companies creating compelling products around generative AI features, which can be developed through traditional software skills and AI-specific knowledge. Companies can hire people out of university, pay for training, and develop their skills to deliver on the hype surrounding AI.

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Implement GenAI security governance

(Dr. FAISST)3 GenAI introduces new security risks, and they won’t be mitigated by traditional cybersecurity methods. With that the security team will need to handle security of two types of components:

• Security of underlying infrastructure.
• Security of the AI system.

While the first part is familiar to most of the security professionals, the second part requires new ways of protection with new approaches, new governance elements and frameworks. These are some new types of risks to be addressed:

• AI behavioural vulnerabilities. The attackers may try to bypass expected AI behavior or make AI systems perform unexpected jobs.
• Dual nature of AI systems. They can be put toward beneficial and harmful goals (same as with human intelligence). For example, it can be used for manipulating speech or video to exploit human vulnerabilities.
• Additional legal and regulatory risks, including copyright and ownership related risks.
• Risks in content being generated by GenAI, for instance, insecure code generation.
• Social including bias, discrimination, reputation, ethics.

This requires a re-assessment of risks and their impacts to your organization, development of GenAI best practices and frameworks, actualization of security awareness trainings. We believe, a GenAI-specific policy is also required. Keep in mind, the technology and its understanding is still on initial phase and the full roster of risks is still unknown – continuous learning and re-assessment is required.

Security is one of the important aspects when selecting the right GenAI platform:

• Part of security concerns can be addressed by selecting GenAI platforms which can be hosted in environments under enterprise control (as compared to open SaaS platforms).
• When leveraging pre-build GenAI models, the preference should be with ones providing transparent, independent, standardized evaluations of capabilities and safety, for instance ones participating in Frontier Model Forum, an industry body organized by Microsoft, Anthropic, Google, and OpenAI (and open for other vendors) to promote the safe and responsible development of frontier AI systems and facilitating information sharing among policymakers and industry.

With new risks, also new opportunities arise for security teams with high potential of leveraging GenAI for information security. Without going into further details, it is not without a reason, more and more security solution providers put a ?AI-powered” label on their offerings.

AI Prompts of the week

(Dr. STORM):

Prompt ChatGPT - Hiring

Create a corporate culture that promote the well-being. This prompt can help you get ideas on what do you need to apply. Copy and paste this prompt in ChatGPT:

“How do you create a corporate culture that values and promotes employee satisfaction and well-being?”

Cool Tools

(Dr. STORM):

1. AI-powered meeting recording tool for all teams -Grain .
2. EKOM uses current SEO data to develop product descriptions.
3. Use Divi to quickly create content automatically.
4. With RankMath , WordPress SEO is simple.
5. Utilize the power of AI automation with Levity .

Misc

(Dr. STORM):

Big Headlines you should know

1. Researchers have created an artificial intelligence (AI) system that can recognize passwords with high accuracy by listening to the keyboard's keystrokes. Results reveal that both phone calls and Zoom calls, the algorithm correctly assigned the right key to a sound 95% of the time.
2. The majority of US voters are concerned about the hazards of AI and support government regulation, according to a poll by the Artificial Intelligence Policy Institute (AIPI). According to the poll, 82% of respondents don't trust tech leaders to govern AI, and 72% of voters favor slowing down AI growth. To help policymakers and address public problems, the AIPI seeks to conduct public opinion research.
3. The Chief Digital and Artificial Intelligence Office will be in charge of Task Force Lima , a generative AI task force that has been established by the US Department of Defense. In addition to prioritizing national security, the task force will examine and use generative AI capabilities to improve operations in business, health, readiness, and policy as well as operations in warfighting.
4. Pope Francis advocates for an open discussion on the implications and meaning of new technologies while highlighting the rapidly growing impact of AI on human activities. He stresses the importance of ethical consideration and appropriate application in order to put AI at the service of humanity and advance justice and peace.
5. With the help of its extensive knowledge base, the consulting firm McKinsey has created a new AI tool called Lilli that can provide answers, insights, and even expert recommendations. This might enable consultants to work more efficiently and produce higher-caliber results.
6. Global Illumination, a startup in New York, has been purchased by OpenAI . Although this is OpenAI's first public acquisition, no financial information has been released. Given its venture capital backing and earlier investments in AI programs, OpenAI is expected to benefit from the talent that it has acquired from Global Illumination.
7. Following China and Elon Musk, Saudi Arabia and the UAE are purchasing Nvidia chips for their goals in AI. Given that Nvidia's stock has tripled this year and has a market valuation of more than $1 trillion, the increase in demand signals possible supply issues.

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Follow/Contact us:

1 Ralf Fuchs, Sourcing Advisory, Start-Up Advisory - Linkedin Ralf Fuchs

2 Dr. Joerg Storm, Global Head IT Infrastructure Mercedes-Benz Mobility , Advisory Board Member Derental - Linkedin Dr. Joerg STORM

3 Dr. Ulrich Faisst, CTO CE, Cognizant - Linkedin Dr. Ulrich Faisst