IoT Analytics launched the Q3/2024 outcomes of their quarterly firm earnings name evaluation.
This evaluation is predicated on a complete dataset of over 8,000 earnings calls from ~4,000 world corporations listed within the U.S. in Q3 2024 and Q2 2024. CEO discussions are more and more centered on sensible AI functions, renewable vitality sources, unpredictable IT outages, and election-related matters, whereas mentions of generative AI, NVIDIA, and the cloud have decreased.
Key insights:
- Based on the most recent “What CEOs talked about” report, 4 themes gained noticeable traction in Q3 2024: 1) sensible AI functions, 2) renewable vitality sources, 3) unpredictable IT outages, and 4) election-related matters.
- Discussions concerning AI barely declined; nonetheless, there’s a noticeable shift towards discussions about particular AI functions, comparable to course of automation, predictive upkeep, and digital twins.
- Renewable vitality 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.
Choose quotes:
- Knud Lasse Lueth, CEO at IoT Analytics, feedback:
“In Q3 2024, we noticed a notable shift in CEO discussions towards AI functions, renewable vitality, IT resilience, and the upcoming U.S. elections. Regardless of this shift, financial issues remained essentially the most mentioned theme total. Traditionally, modifications in CEO dialogue themes have been indicators of shifts in sentiment and company funding habits. I count on these rising matters to play a extra distinguished function in company decision-making shifting ahead.”
- Philipp Wegner, Principal Analyst at IoT Analytics, provides that “AI might need been talked about barely much less in Q3 2024 however it’s nonetheless the important thing know-how that executives talk about. Increasingly more CEOs discuss concrete use circumstances moderately than AI normally.”
What CEOs talked about in Q3 2024: Sensible AI functions, renewable vitality sources, and unpredictable IT outages
The large image
CEOs’ financial issues remained just like Q2 2024. Based on IoT Analytics’ “What CEOs talked about” report for Q3 2024, CEO discussions associated to financial issues have typically 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 few recession appeared combined, as many noticed the danger of world recession as decrease, whereas many others shared issues about industrial recession or country-specific recession, comparable to in China or Germany.
International GDP progress anticipated for subsequent few years. The Group for Financial Cooperation and Improvement (OECD) forecasts world GDP to develop by 3.1% in 2024 and three.2% in 2025. Notable progress projections embrace:
- 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 client 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 price of two.2% in comparison with 2.6% in July 2024. China, which has struggled with depressionary stress after muted financial progress in 2023, reported that its client 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 price, 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 degree since March 2023. The forecasted US financial progress 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 could observe 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
Key rising themes in Q3
1. Sensible AI functions
Elevated curiosity in functions for AI. In Q3 2024, CEOs mentioned utilizing AI and automation to streamline processes at the next price than quarters earlier than. A few 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 functions signifies that corporations want to enhance enterprise outcomes.
Key CEO quote on sensible AI functions
“For giant enterprise shoppers, they have a look at work streams like bill processing, bill accuracy, the kinds of issues which might be each ingested through scanning and issues which might be printed, PDFs and their codecs, and all of the dealing with of all of that robotic course of automation and all of the kinds of developments in that area is simply serving to shoppers be far more environment friendly.” – John Bruno, COO, Xerox Holdings Company, July 25, 2024
2. Renewable vitality sources
Renewables skilled vital rise, although with regional disparity. In Q3 2024, inexperienced vitality 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, vitality costs additionally climbed 38% QoQ to 1.6% earnings calls, offering some indication as to why mentions of those renewable vitality matters rose.
These matters didn’t expertise progress evenly worldwide, nonetheless. Asia-Pacific (APAC) corporations mentioned wind energy in 1.6% (+306% QoQ) of their calls, whereas European, Center Japanese, and African (EMEA) corporations 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. Relating to solar energy, EMEA corporations mentioned it in 1.52% (+886%) of earnings calls, APAC corporations in 1.56% (+103%) of calls, and North American corporations in 0.61% (+13% QoQ).
Basic climate-related key phrases stay pretty regular QoQ. In comparison with renewables, world 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 embrace the extension and for increased 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, brought on by a defective replace pushed by US cybersecurity firm CrowdStrike. Historically, corporations fear about cyber assaults from nefarious sources; nonetheless, with this risk coming from inside the home, company leaders seem like contemplating the essentiality of their IT methods, the impacts of not solely cyberattacks but additionally catastrophic errors, and what preparation is required for fast responses to such occasions.
Key CEO quotes on outages
“Actually, the main focus 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 danger publicity. That’s all the time been there, truthfully, however possibly now’s on the entrance of thoughts as folks 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 brought on by 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. Basic 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 nicely.
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 may 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 degree 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 may very well 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 coming into the scene in This fall 2022, ChatGPT skilled progress in discussions whereas GenAI declined; nonetheless, ChatGPT was solely talked about in 1% of calls (+3% QoQ)—nonetheless decrease than GenAI mentions.
Basic AI discussions dip in comparison with Q2 2024. Basic AI discussionsdropped 2.4% QoQ to 34.4% of earnings calls. That mentioned, it must be famous that just like IoT Analytics’ Q2 2024 protection, AI was the second most mentioned subject, and it inched nearer to surpassing discussions about inflation in comparison with Q2 2024.
NVIDIA and GPUs
GPUs and their largest producer, NVIDIA, much less vital to CEOs in Q3 2024. US-based chips and semiconductor producer NVIDIA—the world’s main knowledge heart 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. Nonetheless, executives emphasised NVIDIA‘s important function of their corporations’ AI methods, notably for high-performance computing wants. There are rising worries concerning the availability of GPUs and escalating prices.
“I assume I’m fairly involved about really having the ability to get state-of-the-art NVIDIA GPUs once we need them.” – Elon Musk, CEO, Tesla, July 24, 2024
“We’re going to purchase increasingly 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 functions: Are we adequately exploring sensible AI functions like course of automation, predictive upkeep, and digital twins inside our group? How can these improve our operational effectivity and cut back prices?
- Renewable vitality: How is our firm leveraging renewable vitality sources, comparable to photo voltaic and wind energy, to scale back our environmental footprint and meet regulatory or market-driven sustainability targets?
- IT outages: Do we’ve got adequate 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 combined sentiments on recession and financial progress 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 may 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 may enhance effectivity in particular departments?
- Sustainability initiatives: Are our sustainability targets aligned with the rising significance of renewable vitality sources, and have we thought of updating our reporting or undertaking methods to mirror 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 rapid consideration?
- Financial forecasts: Ought to we current an up to date evaluation of how recession issues, inflation, and rate of interest modifications could influence our present initiatives or long-term technique?
- Election and coverage: How will we anticipate the 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?
Supply: IoT Analytics
