Pizza Hut vs. AI: Stories you may have missed

I hate to keep harping on artificial intelligence (AI), but it is a dominant and unfolding story – sometimes in less-than-perfect ways.

Take Arizona’s Glendale Community College, which used AI to announce its graduating students last weekend. That decision turned into a disaster, with the program messing many of the names up or completely skipping them altogether.

And this after the school warned students that using AI for research purposes tends to “produce inaccurate information.”

A more recent story still is how Pizza Hut is being sued by Chaac Pizza Northeast, a franchisee that owns over 100 locations from New York state down into Washington D.C. Chaac says that Pizza Hut’s mandated AI kitchen-management system, Dragontail, cost it a whopping $100 million in compensation.

The Register writes:

Now, considering further details about how DoorDash-specific drivers were waiting 15 minutes between orders so they wouldn’t have to make two trips…? Well, I imagine Pizza Hut-owner Yum! Brands (YUM) will argue that’s an employee problem – a responsibility that falls squarely on the franchisee, not the franchiser.

But it’s still an interesting example of how we’re all still figuring out this technology one step at a time.

Along those same lines, OpenAI CEO Sam Altman is walking back his doomsday statements about AI’s impact on jobs.

It was just last year that he spoke at the Federal Reserve’s Capital Framework for Large Banks conference… and predicted that entire job categories would disappear thanks to AI advancements. “Some areas, again, I think just like totally, totally gone,” he said.

Though hardly the most eloquent way of putting it, those words (and similar statements elsewhere) still caused quite the understandable panic.

Altman is walking them back today, however, telling Commonwealth Bank of Australia CEO Matt Comyn that he was “pretty wrong.” He says this change of heart happened after he had AI handle his Slack and email responses… only to find such tasks really do require a human touch at some point.

“We really do care about our interactions with people,” he told Comyn on Tuesday. “This thing… is not something that I can imagine myself outsourcing to an AI anytime soon. It really updated me to thinking that the jobs picture is likely to be very different than we thought.”

Anthropic CEO Dario Amodei is also suddenly singing a different tune. Earlier this year, he was staunchly declaring that AI could eliminate 50% of white-collar jobs within five years. But now he claims it will only make workers more productive.

Skeptics believe that both men are merely putting on a PR campaign as they prepare to take their companies public. And that could be.

Or perhaps they’ve simply realized that, as disruptive as their technology is, it can’t eliminate humanity altogether.

The Google search engine has dominated for decades now. It’s nearly impossible to hold a candle to its reach and capabilities. So I need to be clear: Nobody here expects that it’s going to fall apart anytime soon.

Let’s start with that. But let’s also acknowledge that Google can make missteps, with its heavy AI overhaul perhaps being one of them.

You’ve probably noticed how the search engine now immediately brings up AI-generated results as the top suggestion. And while that works just fine for plenty of people, it’s irritating others.

DuckDuckGo CEO Gabriel Weinberg summed it up this way:

It appears that at least a fraction of internet users agrees with that assessment. DuckDuckGo saw an 18.1% week-over-week jump in U.S. app installs from May 20 to May 25. Additionally, the company reported that its noai.duckduckgo.com option, which completely turns off AI capabilities, saw a 22.7% week-over-week jump in traffic.

Now, I doubt that made much of a dent in the 90% control Google had on the global search engine market when this year began. And as of the middle of May, according to multiple sources, it was still processing over 16 billion searches per day.

DuckDuckGo is without a doubt plucky. But it’s going to take much more than an AI annoyance to take Google down a real peg or two.

Happy SWAN investing!

Brad Thomas
Editor, The Wide Moat Daily

The markets may be up, but that doesn’t mean every single stock is. In fact, there are 10 previous market “darlings” that now trade at a steep discount.

Cell tower giants… specialized real estate… tech consulting firms… These out-of-favor companies may span the sectors, but they all beg the same question.

Are they bargains or value traps?

That’s what Nick Ward and I discuss in this week’s Wide Moat Show, with some interesting conclusions all around.

Catch the full episode right here.