April 12, 2024

Ina here, congratulating "Hoopin' Hamilton" for winning this year's Axios AI+ women's hoops bracket contest. Now we just need to know who you are so we can send you some Axios swag β€” drop us a line. Today's AI+ is 1,162 words, a 4-minute read.

1 big thing: Big banks race to get AI right

Illustration: Natalie Peeples/Axios

The leaders of America's largest banks are convinced that AI will transform their businesses, but they're mostly struggling to implement more than a handful of AI products, even internally, and can't agree on what counts as a win, as Ryan reports.

Why it matters: The massive banking industry is a crucial testbed for transforming the AI industry's promises into real-world results.

Driving the news: A small group of banks is pulling away from the majority on AI thanks to frequent experimentation and investment, per new research from Evident Insights, an AI benchmarking and intelligence platform.

  • JPMorgan Chase, Capital One and Royal Bank of Canada are "ahead" of their competitors and "accelerating away from the pack," per Evident's latest report (PDF).
  • "Successful banks continuously reinvent themselves" through innovation, Evident co-founder and CEO Alexandra Mousavizadeh tells Axios.

JPMorgan Chase CEO Jamie Dimon, in his annual letter to shareholders April 8, said he is "completely convinced" the consequences of AI will be "extraordinary."

  • JPMorgan Chase now employs more than 2,000 AI specialists.
  • The bank also dominates AI research, per Evident's report, with 45% of all papers published by banks in 2023, while Bank of America and Capital One account for 67% of all AI-focused patent filings.

Yes, but: Research is only one piece of the AI puzzle for banks.

Case in point: Jeff McMillan, the new head of firmwide AI at Morgan Stanley, which ranks 17th overall in Evident's index, tells Axios that relationships and staff training matter just as much.

  • McMillan says he and his team have been talking to senior OpenAI engineers and executives "weekly, if not daily" since early 2022, applying those insights into a new AI assistant used by the bank's advisers.
  • "To have direct connectivity to the senior leaders of Open AI β€” the people who invented this β€” I can't tell you what an advantage that has been," he says.
  • The partnership is mutually beneficial: OpenAI gets the stamp of approval of an 88-year-old bank that operates in a strict regulatory environment.
  • But McMillan warns companies not to focus too much on which AI models they use: "You will not fail because your LLMs don't do what you need. You're going to fail because you don't educate and empower your employee base and you don't put the right controls in place."

Reality check: McMillan, like other AI leaders at banks, is delivering only a handful of AI tools β€” which suggests no bank has figured out how to use AI anywhere near its potential.

  • "We've deployed two use cases. But what about a world where we might have 100,000?" he says.

How it works: Morgan Stanley's AI assistant is built on the bank's internal data, sorted to separate what can only be shared internally and what clients can see. Answers to prompts come with supporting citations.

  • Axios received a demonstration of the tool and spoke to financial adviser Patrick Biggs, one of its frequent users, who described how it helps him give advice to clients around the world on topics β€” like minimizing taxes when getting married β€” where rules vary by country.
  • Biggs uses the assistant "several times a day" and says it has "improved dramatically over last 12 months."
  • He feels the biggest win is having the expertise of 80,000 staff at his fingertips without having to track them down via email or phone.

It took months of fine-tuning to get the assistant to this standard, McMillan says: "We went through over 20,000 pieces of feedback" from advisers saying they didn't get what they needed from it.

  • "This idea that you can take 100,000 documents, throw them into a system and somehow expect generative AI to make sense of that: It's a fantasy," he says.

What they're saying: "There's not a single thing that we have produced or probably will produce for some time that is not going to go to a human being for ultimate final checking," McMillan tells Axios.

What's next: Morgan Stanley will go live with a product called Debrief before summer, McMillan says. It allows advisers to record client calls (with consent) to create summaries and recommended actions.

2. "Terminator" director grapples with rise of real AI

Filmmaker James Cameron. Photo: Alberto E. Rodriguez/Getty Images for US-Ireland Alliance

James Cameron is challenging himself to create the next "Terminator" movie, the filmmaker told Axios' Hope King earlier this week.

Why it matters: His depiction of AI gone horribly wrong has helped shape the public's fear of the technology since the first "Terminator" was released nearly 40 years ago.

  • But now, as AI has spread, reality and imagination are merging.

What he's saying: "It's very difficult to write science fiction when you're living in a science-fiction world," Cameron said.

  • Some of the social issues stemming from generative AI, including job displacement, will get "worked out."
  • However, he added: "The actual kind of existential threat to the human species β€” that's not quite here yet. But it's close. It's adjacent."

Yes, but: While he said he's still "exploring the type of story" he wants to tell, he also said that because he's "innately kind of optimistic about the human spirit ... thematically, that will be there."

What we're watching: Cameron said there's no script yet for the next film.

  • "We may look at a multi-film arc, or we may just do one," he said. "I have accepted the challenge of figuring it out."

Zoom out: Earlier on Wednesday, Cameron told Autodesk CEO Andrew Anagnost at a related event that he doesn't take credit for inventing the idea of evil AI.

  • He nodded to characters like HAL 9000 from "2001: A Space Odyssey" and the film "Colossus: The Forbin Project."
  • "But I did put it together with weapons of mass destruction," he said.

The intrigue: Cameron said that if he were "a newly aware super intelligence," the last thing he would do is start a nuclear war.

  • "All those electromagnetic pulses would really mess up all my cognitive capability."
  • Still, Cameron warns against putting AI "in charge of weapon systems."

3. Training data

  • Amazon CEO Andy Jassy shared fresh details about the company's investments in generative AI in an annual shareholder letter released yesterday. Also, AI pioneer Andrew Ng is joining the company's board. (Axios)
  • Apple plans to overhaul its Mac line starting later this year with M4 chips geared toward AI performance. (Bloomberg)
  • Russian intelligence hackers stole emails between federal agencies and Microsoft and potentially collected login credentials during a recent breach of the tech company, a top U.S. cyber official said yesterday. (Axios)
  • OpenAI fired two researchers for allegedly leaking company info. (The Information)
  • Apple is making a change to its repair process this fall that will allow wider use of used parts to repair select iPhones, the firm announced. (Axios)
  • Gen Zers are turning to YouTube and TikTok rather than traditional search engines as they seek quick, relatable answers. (Axios)

4. + This

Stanford Cardinal head coach Tara VanDerveer celebrates at Maples Pavilion after a game against the Oregon Ducks on Jan. 19 in Palo Alto, California. Photo: Brandon Vallance/Getty Images

While we are on the subject of women's hoops, congrats to Stanford coach Tara VanDerveer, who announced her retirement on Tuesday. She retires as the winningest NCAA basketball coach β€” men's or women's β€” with 1,216 victories.

Thanks to Scott Rosenberg for editing this newsletter and to Caitlin Wolper for copy editing it.