Market Insights

With so much buzz about the promise and pitfalls of Artificial Intelligence (AI), The Scotiabank Women InitiativeTM (SWI) for Global Banking and Markets hosted a unique panel discussion on the topic at Scotiabank’s recent Private Technology Company Conference.

Entitled ‘Investing in AI: Opportunities vs. Challenges,’ several top female institutional investors shared insights they’ve gleaned while they comb through the mushrooming AI landscape, in search of the next, lucrative leaders in the field.

The panelists described the unfolding business cases for AI and suggested how investors and entrepreneurs can begin to incorporate this technology for a competitive advantage. And, as successful women in the historically male-dominated financial and tech sectors, they dispensed tips to help other current and emerging women leaders excel.

Uncovering real AI advantages

“Although AI has been around since 1956, it hasn't had a recognizable impact on people’s day-to-day lives, especially when you think of core services like banking and government services,” observed Grace Lee, event co-host and Senior Vice-President, Chief Data & Analytics Officer at Scotiabank. “While we have seen hype cycles before, it seems like we are at a different kind of inflection point to use AI at scale and drive competitive advantage. But it’s important for all of us, including founders and funders, to understand what it takes to turn this promise into real value.”

To help do so, Grace asked panelist Linnea Conrad Roberts, Founder & CEO at GingerBread Capital, to describe the current AI panorama, in which her firm makes direct investments in women founded and co-founded companies and numerous investment funds. 

“I’ve seen many business cycles over my career, and I believe that AI is following a similar path to the Internet itself, which took many years to reveal real commercial uses and become an investable technology,” explained Linnea. “We’ve watched AI and machine learning develop, and now we see real companies with real use cases that can become productive members of society.”

She highlighted how, for instance, AI can drive significant innovation among companies in women’s health and digital healthcare: “If AI can be successfully and smartly applied, we are going to be a better planet for it.”

Fellow panelist Ashley MacNeill, Head of Equity Capital Markets at Vista Equity Partners, noted that, “We are on the precipice of ground-breaking innovations that will be very relevant to broader society.” With her firm focused on large, later stage investments in enterprise software, Ashley’s analysis indicates that, “We see the potential for massive economic and commercial benefits in the software application layer, if AI is implemented properly. It’s not all talk, it’s tangible.”

Cutting through AI hype to find value

Despite their optimism about AI’s potential, the panelists urged thorough due diligence, for both investors who want to pepper their portfolios with AI innovators, and also business leaders who strive to incorporate AI, perhaps by partnering with a technology supplier who makes bold AI-powered promises.

“With our mandate to ‘invest in really smart people,’ we look closely at the company’s management team and whether they have the vision and pacing to actually drive the innovation they promise,” noted Linnea. “Right now, the best applications for AI are often the simplest concepts that can solve a real problem in the marketplace.”

Ashley pointed out that: “In terms of ROI, at this point much of the immediate potential for generative AI is to drive cost savings and efficiency, rather than sales. That’s particularly true in software development when you consider the people hours required, and AI’s ability to reduce this workload.”

To reap those benefits though, both panelists emphasized that a company must first and foremost clean its structured data, to effectively implement AI language models. They must also introduce solid governance, to ensure that the algorithms are written, designed and used for their intended purpose and will not promote misuse.

With those caveats in mind, Ashley and Linnea encouraged entrepreneurs to consider ways that AI can empower their businesses. “Since AI has great potential to reduce business costs and cycle times, it can create many efficiencies in a founder’s life,” explained Linnea. “There are so many hats that a founder must wear, by applying AI to the more mundane tasks, founders can focus more of their time on building relationships with customers, investors and their teams.”

They add that AI tools may soon become a ‘must have’ for those entrepreneurs. Observed Ashley, “Founders will have to recognize the increasing pace at which their business models are changing. It used to take five years to harvest a founder’s idea, but now, with generative AI, that timeframe can be shortened immensely. Leaders will need to be much more adaptive and attuned to how these new technologies will impact the competitive landscape – and by extension their strategies – moving forward.”

Women charting paths in AI frontier

The panelists also noted the similarities between entrepreneurs navigating the fast-paced world of AI and women professionals overcoming obstacles in less representative sectors for women like technology, venture capital and asset management. 

“Like an entrepreneur trying to bring an idea to life, women can face many setbacks on their career journey,” advised Linnea. “In my case, I’m a big believer in flipping the problem on its head, so I’d often say, ‘How lucky I am to be the only woman in this group’, since I can stand out because I’m different.”

She admitted that this sometimes requires a sense of humour: “Remember that unequal treatment by others isn’t always intentional. Don’t confuse ignorance with malice.”

Ashley shared a similar disdain for assumptions: “Don’t assume that an influential person (your boss, a client, or a possible career mentor or sponsor) is too busy to see you. Ask them for coffee, and if they accept, come prepared. They are going to have coffee with someone, so it might as well be you.”

To wrap up the lively discussion, event co-host Kshamta Kaushik, Scotiabank’s Head of U.S. Global Capital Markets, concluded that, “It’s incredible how AI is finding its place in business and society and value creation is making a real turn. However, it’s also important to remember that, while AI can do many things, it can’t replace relationships and experience. That’s why we’re so proud to host this Scotiabank Women Initiative event today, to bring people together for great conversations, and help create a sustainable edge for you.”

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