The winners and losers at dawn of AI
• Few professions can claim to be future-proof, but disruption isn’t new
Generative artificial intelligence (GenAI) has quickly shown that few professions can claim to be future-proof. What we once considered safe professions have suddenly moved into the line of fire. Ironically, these have included the software developers and coders who created the technology.
Companies that specialise in client services and customer care have also been negatively affected by the advent of GenAI — based on the belief that AI would erode their competitiveness.
It’s worth delving deeper into companies in this sector such as Concentrix to gauge how AI could improve their business propositions and address some of the issues that could arise if their clients invest in in-house AI-driven customer experience solutions.
While society has known about AI for years and has seen changes and new technologies being implemented constantly, it has still felt like a classic case of things evolving slowly and then, suddenly, all at once.
Nowhere was this more evident than in looking at the speed with which ChatGPT was adopted. Within five days of launch, more than 1-million users had experimented with ChatGPT. While much of the initial craze might have been driven by curiosity, one thing is for sure: it was clearly not a fleeting fad. ChatGPT attracted 100-million users in just more than two months, something it took TikTok nine months and Instagram more than two years to achieve.
The potential benefits and pitfalls of this technology have quickly become clear.
Within weeks of launching there were numerous allegations and confirmed cases of information being plagiarised, patently false information being generated, and data being used without consent.
The effects didn’t have only theoretical implications, nor were they limited to the job market. It also reared its head in academia. Universities had to start implementing measures to prevent students from using ChatGPT and its rapid learning ability to complete tasks.
ChatGPT was assigned to take entry exams for professions such as law, medicine, finance and everything in between. In many cases, it passed these tests with comparative ease. Even in cases where it did not pass tests the first time, it learnt from those mistakes and inevitably did better when attempting the same test later.
The creative industry is not immune either. Reports are already surfacing about a decline in freelancing design and creative jobs. Anyone looking to create a logo for a new company can simply give ChatGPT the basic details of what they are looking for and will get any number of options to choose from instantaneously.
While it was always thought that AI would first endanger repetitive, rules-based professions, it now seems like every Elon, Bill and Larry might be in the line of fire. In the recent past, even when it was clear that everything related to data, computers, software and AI was becoming an integral part of everyday life, it was thought that software developers and coders were “future-proof” jobs. Now, even a technophobe can create lines of code without any knowledge of the subject matter by simply telling ChatGPT to do so. A career that five years ago was thought to be a safe choice suddenly seems very risky.
However, certain industries and companies are deemed to be more at risk from AI disruption than others. On the surface, US-based Concentrix, a company that specialises in client services and customer care, is at least one of these.
It is one of the world’s largest customer experience companies. It has grown its staff complement from 25 in 2006 to almost 300,000 in 2024 and has evolved from being an operator of call centres to being a partner and extension of the brand for top multinationals when it comes to customer experience journeys.
Like many of their peers, the recent craze around AI has not been good for sentiment, resulting in a number of customer experience companies losing more than 50% of their market capitalisation as investors feared the worst. The biggest risk to the investment case for Concentrix, and, indeed, the industry is undoubtedly the adverse effect GenAI (like ChatGPT) could have on the competitiveness of a large part of these businesses.
This is evident when looking at share prices after the introduction of ChatGPT. Over the course of 12 months, both Concentrix and its largest peer, Paris-based Teleperformance, underperformed the S&P 500 by more than 50%. While an AI overhang could make sense and even be expected, 50% just seems too much.
Management (predictably) states that GenAI is not a threat to the business but actually an enabler, an opportunity to automate low-complexity, lowmargin tasks further. This may make sense. Regarding GenAI specifically, AI and machine learning have been used in the industry for years, and Concentrix already deploys AI tools across about 70% of the business.
Another factor is that for businesses to implement AIdriven solutions (and therefore to cut out service providers like Concentrix), a host of separate issues will arise. These include data security, data ownership and data integrity. Solutions such as this generally do not run on their own and large language models have predictability and reliability issues of their own.
While there remains a perception that customer services might be vulnerable to the coming AI boom, it is worth noting that disruption is not new.
Take the advertising industry: even though the tools exist for large corporates to insource their entire advertising operation, they don’t. They recognise they are not the experts, typically outsourcing the work to large advertising agencies that use the tools and technologies at their disposal to deliver a superior product.
This might turn out to be the case in the customer experience and engagement industry too.
NOW, EVEN A TECHNOPHOBE CAN CREATE LINES OF CODE WITHOUT ANY KNOWLEDGE OF THE SUBJECT
IT HAS STILL FELT LIKE A CLASSIC CASE OF THINGS EVOLVING SLOWLY AND THEN, SUDDENLY, ALL AT ONCE