In brief
- In response to the most recent “What CEOs talked about” report, 4 themes gained noticeable traction in Q3 2024: 1) sensible AI purposes, 2) renewable power sources, 3) unpredictable IT outages, and 4) election-related matters.
- Discussions concerning AI barely declined; nevertheless, there’s a noticeable shift towards discussions about particular AI purposes, comparable to course of automation, predictive upkeep, and digital twins.
- Renewable power sources climbed in mentions, as did discussions round IT outages and the upcoming US election (together with candidates).
- Generative AI, NVIDIA, and the cloud all see drops of their mentions.
Why it issues
- The prioritization of particular matters by CEOs might affect funding in these areas.
The large image
CEOs’ financial considerations remained just like Q2 2024. In response to IoT Analytics’ “What CEOs talked about” report for Q3 2024, CEO discussions associated to financial considerations have usually leveled off or decreased in significance quarter-over-quarter (QoQ). There was little change within the variety of discussions round rates of interest—nonetheless at ~27%—whereas inflation dropped 1.9% QoQ to 35.8%.
In the meantime, discussions concerning recession considerably climbed 29.5% QoQ to five.3% of calls. CEO emotions a couple of recession appeared blended, as many noticed the chance of international recession as decrease, whereas many others shared considerations about industrial recession or country-specific recession, comparable to in China or Germany.
World GDP development anticipated for subsequent few years. The Group for Financial Cooperation and Growth (OECD) forecasts international GDP to develop by 3.1% in 2024 and three.2% in 2025. Notable development projections embody:
- India –6.7% in 2024; 6.8% in 2025
- China –4.9% in 2024; 4.5% in 2025
- US –3.2% in 2024; 1.6% in 2025
- Euro space – 0.7% in 2024; 1.3% in 2025
- Argentina – minus 4.0% in 2024; 3.9% in 2025
Inflation trending downward in lots of areas. In August 2024, US shopper costs fell to their slowest rise since February 2021 at 2.5%. The Euro space has additionally seen decrease inflation charges in August, reaching an annual charge of two.2% in comparison with 2.6% in July 2024. China, which has struggled with depressionary strain after muted financial development in 2023, reported that its shopper value index rose 0.6% year-on-year (YoY) in August 2024.
Rates of interest dropping, although buyers stay cautious. In response to the decrease inflation charge, the US Federal Reserve made the long-awaited resolution to decrease its benchmark rate of interest by half a proportion level on 18 September 2024, bringing it to its lowest stage since March 2023. The forecasted US financial development slowdown and a weakening labor market appeared to play closely within the excessive reduce made by the Fed. In the meantime, the Individuals’s Financial institution of China additionally reduce charges by 0.5 proportion factors in late 2024 and signaled it will comply with up with additional cuts to assist spur its sluggish economic system.
Key CEO quote on the macroenvironment
“After a break in progress, inflation now seems again on a downward trajectory.”
– Jane Fraser, CEO, Citigroup Inc., July 12, 2024
“We’ve seen what I name industrial recession.”
– Sanjiv Lamba, CEO, Linde plc, August 7, 2024
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Key rising themes in Q3
1. Sensible AI purposes
Elevated curiosity in purposes for AI. In Q3 2024, CEOs mentioned utilizing AI and automation to streamline processes at the next charge than quarters earlier than. A number of the key AI-related use circumstances talked about on this regard are:
- Course of automation – Up 59% QoQ to ~0.6% of earnings calls
- Digital twin – Up 35% QoQ to ~0.6% of earnings calls
- Conversational AI – Up 28.6% QoQ to ~0.4% of earnings calls
- Predictive upkeep – Up 48% QoQ to ~0.4% of earnings calls
- Constructing automation – Up 29.5% QoQ to ~0.2% of earnings calls
The rise in discussions about AI purposes signifies that firms need to enhance enterprise outcomes.
Observe: IoT Analytics plans to publish a report on industrial AI in This autumn 2024. These thinking about accessing these stories when they’re launched can join IoT Analytics’ IoT Analysis Publication by clicking under.
Key CEO quote on sensible AI purposes
“For giant enterprise purchasers, they take a look at work streams like bill processing, bill accuracy, the sorts of issues which are each ingested through scanning and issues which are printed, PDFs and their codecs, and all of the dealing with of all of that robotic course of automation and all of the sorts of developments in that area is simply serving to purchasers be way more environment friendly.”
– John Bruno, COO, Xerox Holdings Company, July 25, 2024
2. Renewable power sources
Renewables skilled vital rise, although with regional disparity. In Q3 2024, inexperienced power matters rose considerably in mentions. Discussions round solar energy climbed 78.6% QoQ to ~1% of earnings calls, whereas wind energy rose 58.3% QoQ to ~0.5%. Relating to those matters, power costs additionally climbed 38% QoQ to 1.6% earnings calls, offering some indication as to why mentions of those renewable power matters rose.
These matters didn’t expertise development evenly worldwide, nevertheless. Asia-Pacific (APAC) firms mentioned wind energy in 1.6% (+306% QoQ) of their calls, whereas European, Center Jap, and African (EMEA) firms mentioned it in 1.2% (+92% QoQ) of their calls. In distinction, North America was the one area with fewer mentions of wind energy QoQ, down 47% to 0.12% of calls. Concerning solar energy, EMEA firms mentioned it in 1.52% (+886%) of earnings calls, APAC firms in 1.56% (+103%) of calls, and North American firms in 0.61% (+13% QoQ).
Normal climate-related key phrases stay pretty regular QoQ. In comparison with renewables, international boardroom discussions concerning normal climate- and sustainability-related matters have been comparatively unchanged QoQ:
- Sustainability – Rose 8.5% QoQ to 19.3% of calls
- Emission – Declined 0.7% QoQ to 11.1% of calls
- Local weather – Rose 8.3% QoQ to eight.3% of calls
- ESG – Declined 0.2% QoQ to six.5% of calls
Key CEO quotes on renewables
“Proceed to progress our sustainability agenda, and up to date notable highlights embody the extension and for greater quantity of a solar energy buy settlement to 2030 will cowl as much as 40% of German demand wants.”
– Oliver Graham, CEO, Ardagh Steel Packaging S.A.,July 25, 2024
“On present estimates, China will add 250 gigawatts of latest wind and solar energy capacities simply this yr.”
– Chiang Tung Keung, CEO, CLP Holdings Ltd, August 05, 2024
3. Unpredictable IT outages
Crowdstrike/Microsoft outage generate dialogue round methods to keep away from system failures. Company executives mentioned IT-related outages in 6.5% of earnings calls, a 65.7% rise QoQ. Spurring this dialogue was the July 2024 worldwide IT methods crash affecting Microsoft Home windows, attributable to a defective replace pushed by US cybersecurity firm CrowdStrike. Historically, firms fear about cyber assaults from nefarious sources; nevertheless, with this menace coming from inside the home, company leaders seem like contemplating the essentiality of their IT methods, the impacts of not solely cyberattacks but in addition catastrophic errors, and what preparation is required for fast responses to such occasions.
Key CEO quotes on outages
“Definitely, the main target has traditionally been on sort of malicious intent on a cyber hack, however actually a system outage not pushed by a cyber assault does create a brand new type of threat publicity. That’s all the time been there, truthfully, however perhaps now could be on the entrance of thoughts as individuals look to see the kind of cowl that they’ve.”
– Eric Anderson, CEO, Aon Plc, July 26, 2024
“So the significance of mission criticality has gone up considerably for the reason that outage that was attributable to CrowdStrike.”
– Jay Chaudhry, CEO, Zscaler, September 03, 2024
4. Elections and coverage
Election discussions are heating up. The US presidential race on November fifth is quickly upon us, and with it, a steep climb in discussions round it. Normal mentions of election rose 47.7% QoQ to 24.8%, and although Doland Trump has had mentions in a small variety of earnings calls all through 2024, Kamala Harris’s sudden entry into the race put particular mentions of her in some boardroom discussions as properly.
Coverage on the forefront of CEO minds this election season. Whereas particular mentions of the candidates have been a really small portion of earnings calls, the influence they might have on coverage was extra prevalent. Discussions concerning coverage normally rose 21% QoQ to 22% of earnings calls, and tariff discussions rose 56.7% QoQ to 7% of calls.
Key CEO quotes on the election and coverage
“Now the entry of Kamala Harris into the presidential race and the excessive stage of fundraising for each Harris and Donald Trump is leading to new {dollars} spent with us.”
– Adam P. Symson, CEO, The E.W. Scripps Co., September 8, 2024
“We might be seeing some pulling ahead of demand, most notably in North America, with the US election in November and the uncertainty about future import tariffs.”
– Vincent Clerc, CEO, A.P. Moller – Maersk, August 10, 2024
Declining themes in Q3
AI and generative AI
Generative AI (GenAI) continues decline in mentions. CEO discussions concerning GenAI dropped 16% QoQ to six.6% of earnings calls—the 2nd consecutive quarter for such decline. Noteworthy in that is that for the primary time since getting into the scene in This autumn 2022, ChatGPT skilled development in discussions whereas GenAI declined; nevertheless, ChatGPT was solely talked about in 1% of calls (+3% QoQ)—nonetheless decrease than GenAI mentions.
Normal AI discussions dip in comparison with Q2 2024. Normal AI discussionsdropped 2.4% QoQ to 34.4% of earnings calls. That mentioned, it ought to be famous that just like IoT Analytics’ Q2 2024 protection, AI was the second most mentioned matter, and it inched nearer to surpassing discussions about inflation in comparison with Q2 2024.
Observe: In December 2023, IoT Analytics revealed its 154-page Generative AI Market Report 2023–2030, which shares market knowledge, forecasts, developments, and key gamers. IoT Analytics plans to publish a report on generative AI in This autumn 2024. These thinking about accessing these stories when they’re launched can join IoT Analytics’ IoT Analysis Publication by clicking under.
NVIDIA and GPUs
GPUs and their largest producer, NVIDIA, much less essential to CEOs in Q3 2024. US-based chips and semiconductor producer NVIDIA—the world’s main knowledge center GPU producer— declined 19.5% QoQ to 2.6% of earnings calls, and mentions of GPU additionally dropped 3.2% QoQ to three.5% of earnings calls. Nevertheless, executives emphasised NVIDIA‘s important function of their firms’ AI methods, notably for high-performance computing wants. There are rising worries in regards to the availability of GPUs and escalating prices.
“I assume I’m fairly involved about truly with the ability to get state-of-the-art NVIDIA GPUs after we need them.”
– Elon Musk, CEO, Tesla, July 24, 2024
“We’re going to purchase increasingly more GPUs.”
– Eric Yuan, CEO, Zoom Video Communications, Inc., August 21, 2024
Cloud suppliers
Cloud suppliers see drops in mentions. Mentions of two main cloud suppliers, AWS and Azure, decreased in Q3 2024. AWS fell 12.3% QoQ to 2.3% of calls, whereas Azure dropped 11.3% QoQ to 1.5%.
What it means for CEOs
5 key questions that CEOs ought to ask themselves based mostly on the insights on this article:
- AI purposes: Are we adequately exploring sensible AI purposes like course of automation, predictive upkeep, and digital twins inside our group? How can these improve our operational effectivity and cut back prices?
- Renewable power: How is our firm leveraging renewable power sources, comparable to photo voltaic and wind energy, to scale back our environmental footprint and meet regulatory or market-driven sustainability objectives?
- IT outages: Do we’ve enough catastrophe restoration and response plans to mitigate the influence of unpredictable IT outages from each exterior cyberattacks and inside operational errors?
- Financial outlook: Given the blended sentiments on recession and financial development forecasts, how are we making ready for potential downturns, particularly in key markets like China or Germany?
- Election affect: With the US election on the horizon, how might potential modifications in coverage, tariffs, and authorities spending have an effect on our enterprise operations and technique?
What it means for these serving CEOs
5 key questions that these serving CEOs ought to ask themselves based mostly on the insights on this article:
- AI integration: Are we staying knowledgeable on the most recent AI developments, and have we evaluated whether or not AI use circumstances comparable to automation and predictive upkeep might enhance effectivity in particular departments?
- Sustainability initiatives: Are our sustainability objectives aligned with the rising significance of renewable power sources, and have we thought of updating our reporting or mission methods to replicate this focus?
- IT resilience: What steps are we taking to make sure IT resilience within the face of accelerating discussions round unpredictable IT outages? Is there any hole in our present IT infrastructure that requires speedy consideration?
- Financial forecasts: Ought to we current an up to date evaluation of how recession considerations, inflation, and rate of interest modifications might influence our present tasks or long-term technique?
- Election and coverage: How can we anticipate the end result of the upcoming US election will have an effect on key areas of our enterprise, and have we ready any situation planning based mostly on potential coverage modifications?
Extra data and additional studying
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In regards to the report
The Quarterly Development Report: What CEOs talked about in Q3/2024 is a 63-page report on the developments that emerged in Q3/2024 earnings calls. The report relies on knowledge from 95,000+ company earnings calls of US-listed firms from Q1/2019 via Q3/2024.
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