Forward-thinking CEOs, of course, have known for some years that the new generation of technologies—cloud computing, an explosion of data, machine learning—were going to transform their companies and their industries. But ChatGPT showed them the power, sparking imaginations in ways previous technology tools hadn’t. It is so intuitive and easy for even a CEO to use. I spent a couple of hours this weekend conversing with Google’s Bard about ideas to grow Fortune Media—and the Bard’s ideas weren’t half bad! And far less costly than a consultant.

But generative A.I.’s ease of use also underscores its limitations. It provides guesses, based on publicly available information, and it can neither calculate numbers nor verify facts. That’s probably why there’s such a gap, according to the IBM study, between CEOs and their teams. While 75% of CEOs are charging toward transformation, only 30% of their team members believe their organization is ready for the change, and only 29% believe they have the needed skills. “There’s a significant disconnect between what the CEO says and what their team says,” IBM’s Jesus Mantas told me. Moreover, concerns are still high around data security, data accuracy, and so-called “hallucinations”—that is, the technology’s tendency to make stuff up. As CaixaBank CEO Gonzalo Gortazar told the IBM team: “Generative A.I. models surprise, impress and scare us, all at the same time.”

CEOs say productivity gains are the top reason for implementing A.I., but they are mixed about the effects on employment. Some 46% say they have hired additional workers due to generative A.I., while 43% say they have reduced workforce. Over the next twelve months, 26% say they will hire more, 28% say hire less. The survey shows they are also concerned by steadily rising regulatory threats.

But while the exact applications remain fuzzy and the effects remain unclear, CEOs are clearly rushing headlong into the A.I. future. “It’s a quantum leap,” says Mantas.

You can read the full study here. Other news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

TOP NEWS

A new record

A record number of Black CEOs are leading Fortune 500 companies after Dave Bozeman took over C.H. Robinson, the transportation and logistics company currently ranked in 160th place. Bozeman previously worked for both Ford Motor and Amazon. There are now nine Black Fortune 500 CEOs—still a paltry 1.8% of the total. Fortune

Starbucks pride

Starbucks is issuing “clearer” guidelines on how to display Pride-themed decorations in its stores, reports Bloomberg. Earlier in June, a Starbucks union accused the company of banning such displays, which the company denied at the time. The Starbucks debate comes amid a wider conservative backlash against corporate support for LGBT issues. Bloomberg

Microsoft vs. Sony

Microsoft was prepared to "spend Sony out of business" as part of the company’s video gaming strategy, according to internal documents, released as part of an FTC court hearing challenging Microsoft’s $68.7 billion acquisition of Activision Blizzard. Other documents reveal that Microsoft was ready to acquire studios like mobile developer Zynga and Sega, developer of “Sonic the Hedgehog,” to bolster its gaming offerings. The Verge

AROUND THE WATERCOOLER

BlackRock CEO Larry Fink, who faced intense backlash for championing ESG, says he’s ‘ashamed’ the topic has become politicized by Prarthana Prakash

Morgan Stanley says commercial real estate will crash harder than during the Great Financial Crisis. Here’s how 5 other top institutions see it playing out by Alena Botros 

Decoding Gen Z has helped Roblox become a $23 billion metaverse sensation. These are its 5 tips for tapping into the next generation by Massimo Marioni

59% of U.S. internet users are already on ChatGPT, BofA survey finds by Stephen Pastis

Tech’s era of generosity is over, as Silicon Valley starts to replace freebies with airline-style upcharges and fees by Matt Weinberger

One year after Roe v. Wade was overturned, employers haven’t done enough to protect abortion rights by Emma Hinchliffe

This edition of CEO Daily was curated by Nicholas Gordon.