Want to impress Wall Street? Just add some AI

When Endeavor CEO Ari Emanuel opened his company’s earnings call with prepared remarks on Feb. 28, a casual listener who heard him tout the UFC and WME might have missed the most interesting part: Emanuel didn’t speak at all.

Well, actually he was. The words were his, and the voice was his, but instead of Emanuel speaking into a microphone (opening remarks on earnings calls are often pre-recorded), the remarks were the product of a generative artificial intelligence company called Speechify.

So why did Ari Emanuel (er, “AI Emanuel”?) use his company’s Q4 call to add machine learning to its financial report? “We do business with them, we think they are a really good company,” Emanuel said of Speechify (and yes, Endeavor disclosed in its press release that the comments would be computer generated), but he also noted that “ we thought with all the talk about AI … we thought it was a good time to put this in our neighborhood, and for you guys to hear what it’s like.”

Indeed, artificial intelligence has been hard to avoid for Wall Street viewers this year. And it’s easy to see why: AI news has led to share price gains at companies like BuzzFeed (which uses it and saw its share price more than double) and Microsoft (whose rise was in the high single digits).

After the public release of OpenAI’s LLM (Large Language Model) chatbot ChatGPT (and the stock bounce it brought to Microsoft, OpenAI’s technology partner), it seems every company wants a piece of the AI ​​action, or at least wants to send the message that it is remembering. Companies with close ties to media and entertainment are no exception.

In his first letter to creators as CEO of YouTube, Neal Mohan wrote on March 1 that “the power of AI is just beginning to emerge in ways that reinvent video and make the seemingly impossible possible,” and that it’s a priority for him. will be .

Spotify, led by CEO Daniel Ek, released what it calls an “AI DJ” powered by technology from OpenAI on February 22. The DJ takes the music a Spotify user listens to and combines it with recommendations from music experts and an AI-generated voice to create a completely personalized radio show.

Snap, run by Evan Spiegel, has released an assistant called “My AI” based on ChatGPT, bringing the capabilities of that LLM to Snapchat+ users.

And with small digital publishers like the Jonah Peretti-led BuzzFeed and Arena Group Holdings (the owner of Sports illustrated), AI is touted as a source of new forms of storytelling that “can create enterprise value for our brands and partners,” said Ross Levinsohn, CEO of Arena Group.

Sure, AI’s potential for transforming businesses is real (in a March 2 research report, Morgan Stanley called it a “$6 trillion opportunity”), but it remains just that: an opportunity, rather than today’s reality .

“We’ve been through some ‘hype’ cycles in technology investments over the past 20 years,” Goldman Sachs analysts Eric Sheridan and Kash Rangan wrote in a Feb. 8 investigative report, calling last year’s ‘metaverse’ talk. “Such cycles typically create investor exuberance that far exceeds actual economic shifts of products and units, while overlooking the heavy lifting of actual investment cycles and necessary product iteration, which typically take years to develop.”

Wall Street is still very bullish on AI in the long run, with Bank of America’s Haim Israel and Martyn Briggs writing in a Feb. 28 thematic report that AI is “at a defining moment — like the internet was in the ’90s.” , but the consensus is that while big tech companies like YouTube owner Alphabet, Amazon and Apple will reap the rewards at some point, it’s currently less clear what it means for smaller companies.

For entertainment companies, the potential is obvious, even if the business models are not. The Morgan Stanley report pointed to the logic in AI recommendations for streaming services like Spotify and Netflix (Spotify’s DJ is a first step in that direction), and it’s not hard to think that content itself could be created faster and cheaper with generative technology (applications may include special effects, which are labor intensive and costly).

For companies like Endeavor and CAA, generative speech technology (such as Speechify’s) and deepfake technology (such as Deep Voodoo, a deepfake company from the creators of South Park which counts CAA Ventures as an investor), could mean new opportunities for longtime actors (see Robert Zemeckis’s upcoming film Herewho will use AI from Metaphysic to age Tom Hanks).

In the long run, the changes could be more profound, with Israel and Briggs talking about “moving video content from a one-to-many content creation model to a one-to-one content consumption model that can be personalized.”

That potential can even be seen today with BuzzFeed, which uses OpenAI technology to create hyper-personalized quizzes (“There’s the MCU, but this AI quiz will create a You-CU by writing you into a superhero movie” is one of the options).

But today’s offerings also underscore just how hollow the AI ​​hype really is. The products available today, from personalized quizzes and AI DJs to chatbots and deepfakes, are still firmly in the gimmick stage.

So while the possibilities are real, to borrow a term for false information created by LLMs, current stock prices could be a “hallucination.” And those looking for a piece of the AI ​​pie should also proceed with caution. Michael Atleson, an attorney in the Federal Trade Commission’s advertising practices division, wrote an open letter on Feb. 27 outlining what his agency is looking at as the “AI hype” creeps through corporate America.

“What exactly is ‘artificial intelligence’? It is an ambiguous term with many possible definitions,” Atleson writes. “But one thing is certain: it is a marketing term. Right now it’s a hot one. And at the FTC, we know one thing about popular marketing terms: some advertisers won’t be able to stop overusing and abusing them.”

In other words, the FBI is keeping a close eye on those AI claims.

This story first appeared in the March 8 issue of The Hollywood Reporter magazine. Click here to subscribe.