Venture Capital

Venture Capitalist Kai-Fu Lee Says CIOs Should Prepare for AI-Related Disruption


Chief information officers can take a number of steps to help their companies prepare for the job disruption that artificial intelligence will cause over the next several years, according to venture capitalist

Kai-Fu Lee.

Dr. Lee, chairman and chief executive of venture-capital firm Sinovation Ventures and author of “AI Superpowers: China, Silicon Valley and the New World Order,” maintains that AI “will wipe out a huge portion of work as we’ve known it.”

He hit on that theme again Tuesday when he spoke at The Wall Street Journal’s virtual CIO Network summit.

Artificial intelligence, Dr. Lee said, “can be used to improve margins or save costs. And when it comes to using AI for saving costs, then that usually means you’re doing some tasks that normally [a] human does. And that means the more successful you are with your AI, you’re potentially replacing jobs—and displacing jobs—that may cause a reduction in force.”

But keep in mind, he said, technological progress has always meant job replacement. When computers first came along, the machines replaced typists, telephone operators and other positions. Information technology executives in the past prepared their companies for this type of disruption, he said.

The CIO’s role now is to advise their chief executives on the AI transition ahead. CEOs, he said, “usually don’t think in terms of what technology might cause job displacement.”

CIOs can help chief executives work out a road map for what jobs will be replaced and when, said Dr. Lee, who oversaw the China operations of

Alphabet Inc.’s

Google from 2005 to 2009.

Those plans should be made in a way that is sensitive to employees, he said. That involves thinking about which jobs are inevitably going away, how to tell the employees in a gentle way that their positions are being eliminated and how to retrain them for new careers, he said.

AI ‘will wipe out a huge portion of work as we’ve known it.’

— Author and venture capitalist Kai-Fu Lee

As AI is deployed, the CIO needs to be an adviser across the organization. As artificial intelligence becomes available to replace routine jobs in human resources, legal and accounting, CIOs should be evaluating the software and helping business units select packages that are best in class, he said.

He compares what is happening with AI today to the early days of the internet. At that time, CIOs were evangelists, learning about the technology and sharing what they learned with the rest of the organization.

“The CIO was probably teaching the marketing department, the customer service department, what the internet was and how they should use it,” he said.

Likewise, today’s CIOs, he said, “should be willing and ready to transition and teach…so that as AI becomes pervasive like [the] internet, you’ve done your job in that transition process.”

Write to John McCormick at [email protected]

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