Governance in The Age of Gen AI
A Director’s Handbook on Gen AI
by
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Artificial intelligence. AI. Machine learning. AI analytics. Predictive AI. These references are new, technical, alien, provocative, alarming, and if one is an executive or a director of a company, vaguely distant and threatening. Like the title of the American movie, technology is “Everything Everywhere All at Once”. Why is it that we feel these complex, confusing emotions? Is it the technology itself? The promise of it? The perils associated with it? Our lack of complete understanding and knowledge of it? Or, is it the torrent of new developments and information on this new topic, on a daily basis? Generative AI made a splashy debut in November 2022, when US-based OpenAI announced the general availability of their then-latest ChatGPT offering. ChatGPT claimed to make available a conversational interface to the contents of the entire internet, using the English language as the means of interaction. Following its introduction, ChatGPT became the fastest-adopted technology in history. Within two months, over 100 million users were using ChatGPT around the world. Tens of thousands of articles were written in major language about this exciting, new technology. We were bombarded with unstructured information about the possibilities. ChatGPT was declared the “Word of the Year” by TIME Magazine. The sheer volume and speed of this deluge made it impossible to ingest and digest it all. At its foundation, this awakening led to a vague sense of unease. Deeper still, it led to a deep sense of distrust, leading to more questions than calm. This is not the first time that a technology has been hyped. A scant few years ago, blockchain technology, cryptocurrency, and “mining” were touted as the next tsunami. Businesses, board members, and management were encouraged to either embrace the wave or risk becoming irrelevant. Yet, sometimes later, while businesses and fortunes have been both built and lost, the overall impact of blockchain has been rather modest, although deep in certain pockets. Artificial intelligence itself has experienced a few false positives along its journey. So, what is different today? This is indeed the most relevant question for directors and management to ask. The difference is that both compute and data storage capability have escalated while their cost have been dramatically reduced, following exponential cycle defined by Moore’s Law. Roughly sixty years ago, Gordon Moore, a co-founder of Intel, asserted that the number of transistors on microchips will double every two years as the costs deescalate. In that year, there were 64 transistors on a single microchip. Today, there are more than one billion transistors on a similarly sized microchip. Similarly, data storage is following an exponential growth path. Both compute and data storage at scale are prerequisites to successfully harness AI. The fuel for artificial intelligence is raw data. Taking advantage of the continually exploding data on the internet, the models underpinning generative AI can now be trained. This combination and convergence of circumstances and techniques, along with advances in statistical methods and computational algorithms, has led to a kind of Cambrian explosion in AI. Drawing talents from some of the most competent, prestigious, and renowned engineering schools in the world, leading technology companies started to heavily invest in researching AI methods a decade ago. The accretive outcomes of these investments has begun to pay-off. ChatGPT took advantage of these advancements when it created the “Wow!” movement in its debut. Subsequently, the media has focused on headlining advancements in generative AI as much for eye-popping valuations as for their vaunted capabilities or, in several hilariously well-covered instances, lack thereof. In the aggregate and on balance, following intense activity and media coverage, it is clear that generative AI has become a general-purpose technology. Like electricity as a source of power, it is omni-purpose. It is increasingly understood that generative AI is pervasive and can be adopted in different ways to suit the needs of each circumstance. Transitioning from early skepticism to rapid maturity, the questions have shifted to those areas focused on strategy and risks. What should board members and management know about AI? What do they need to learn about generative AI? How much potential does generative AI possess? What should those in the boardroom expect? Why should generative AI be embraced? How much should companies invest and when? What is the expected ROI? What are the technology’s inherent and residual risks? In the twelve chapters, the reader will be able to delve deeper into the technical aspects of generative AI, explore real-world examples, and gain practical insights on implementing generative AI. This handbook is not just a guide but a call to action to embrace the transformative power of generative AI, leading with foresight and integrity, and shape a future where technology serves as the leading edge. Welcome to the next generation of AI. Together, we can harness its potential and drive a new era of innovation and progress.
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About the Book
Board members and management need to understand how generative AI impacts their business and the industry, and what strategic choices will enable them to exploit the opportunities and manage the challenges. In Governance in The Age of Gen AI, authors Ashwin Rangan and Dean A. Yoost present twelve vantage points on generative AI. Beginning with a discussion of the new foundation of artificial intelligence, market, and competitive analysis, and the technology and AI infrastructure requirements, the chapters move to the criticality of data governance, and hallucinations, prompt engineering, and retrieval-augmented generation. Rangan and Yoost then transition to the critical roles and skills development, managing the risks, and testing, evaluation, and measuring the success, as well as software development and system integration, creating the strategy, and the board’s governance in the age of AI. It closes with perspectives on what is likely to be next. The handbook serves as a guide for directors and management, offering a practical lens to the most important questions and emerging challenges with generative AI. In an easy-to-read and understandable format, it offers information about the fundamentals of AI, and it tells how to stimulate creative and critical thinking in the boardroom. The power of generative AI is just beginning to be recognized and valued. Board members and executives need to be fully informed to get their organizations on top of the wave.
About the Author
Ashwin Rangan has served as an executive with leading businesses including Walmart and Rockwell International, capping a 25-year career in the C-suite. He most recently was the chief innovation and information officer with ICANN, the Internet Corporation for Assigned Names and Numbers, a global organization with the charter to ensure the security, stability, and resilience of the internet. Ashwin currently serves on the board of GrandPad, an innovator in ElderTech; and the board of the National Association of Corporate Directors, Pacific Southwest Chapter. He is a member of the Corporate Directors Roundtable of Orange County. Ashwin is the author of two books on technology and the chief information officers. Ashwin has a track record of serving on boards where he has guided businesses to successful outcomes. He was a director of PiVX, an early leader in cyber security software. PiVX was a publicly-traded company acquired in 2005 by private equity firm The Lotus Fund. He also served on the board of Integrien, an innovator in software in monitoring data center performance. Integrien was acquired by VMWare in 2010. In addition, he served as a director of MarketShare, a category-defining pioneer in cloud-based analytics. MarketShare was acquired in 2015 by Neustar, a TransUnion company. Ashwin lives in North Tustin, California with his wife, Deepa. He can be reached at thecio@hotmail.com. Dean A. Yoost is a board member of Pacific Life Insurance Company and one of three advisory committee members of American Honda Finance Corporation. He was the chairman of Vicara Health, a software company in healthcare. For many years, Dean was a director of a large foreign-owned bank and two companies listed on the New York Stock Exchange. He is the author of six books on corporate governance and over 100 essays and editorials in leading business journals and newspapers. Dean retired as a partner with PricewaterhouseCoopers after 33 years with the firm where he held numerous client service and executive positions. Dean lived and worked in Tokyo and Beijing for 16 years, serving the needs of clients as well as establishing and building PwC’s businesses in Asia. He was elected as a director to the 18-partner Global Oversight Board of PwC International Limited, the top governing body of the global network of firms. At his retirement, Dean was the managing partner in Orange County, California and the regional leader of its advisory services practice. Dean is a trustee and member of the executive committee of the University of California, Irvine Foundation. He is a founder and serves as the emeritus chairman of the Corporate Directors Roundtable of Orange County and an emeritus board member of the National Association of Corporate Directors in the Pacific Southwest. Dean resides in Irvine, California with his wife, Mei Chiang, and their three german shepherds, Otto, Helga, and Oscar. He can be reached at dean@deanyoost.com.