Foreword

Alyson Shontell

Editor-in-Chief

Earlier this week, I returned from our annual Fortune Global Forum, which we held in Riyadh, Saudi Arabia.

For the opening panel on global business transformation trends, I moderated a panel featuring Alphabet (No. 7) President and Chief Investment Officer Ruth Porat, Barclays (No. 47, Fortune 500 Europe) CEO C.S. Venkatakrishnan, and H.E. Khalid A. Al-Falih, Minister of Investment for the Kingdom of Saudi Arabia.

Porat has one of the best views on the evolution of AI, given that she travels the world speaking to leaders—and that she’s had a front-row seat to Alphabet building the future of AI via DeepMind for the last decade.

AI, she says, is moving both very fast and very slow. Scientific breakthroughs, particularly in AI and health care, are moving very quickly. A few examples Porat cited were new developments in the integration of quantum computing and AI, and recent advances in AlphaFold, a Nobel Prize-winning project from DeepMind’s founder that is able to predict the 3D structure of proteins. She feels confident cancer will be cured in the not-too-distant future due to rapid, AI-driven progress (Porat is a two-time survivor).

Corporate adoption, however, is moving much more slowly, and in this capacity, China is outpacing the U.S. in terms of its dedication to nailing AI implementation, while American business leaders show reticence. (For more on China’s increasing edge in the AI future, check out former Google CEO Eric Schmidt’s recent essay.)

“Adoption in a truly substantive way so that each one of us can have that economic uplift AI offers [is moving slower],” Porat said. “The upside from AI requires a fundamental rethink of every process. It is so much more than a chatbot...we need to just get on that journey as leaders. We each need to be using it so that we can see the potential for unlocking it; the transformative opportunity is profound.”

You can watch the panel discussion and hear Porat’s full comments here.

Also, don’t miss: Fortune, in partnership with Lightspeed and AWS, launched its third annual Fortune Cyber 60: The most innovative startups in cybersecurity. Check out which businesses are leading in this ever-important space.

Deals & Developments

Novo Nordisk (No. 368 on the Fortune Global 500) made an unsolicited bid for Metsera, a New York-based developer of obesity drugs that agreed to be acquired by Pfizer (No. 67) for up to $7.3 billion last month. Novo Nordisk’s bid is worth as much as $9 billion, per the Wall Street Journal, and gives Pfizer just four business days to make an offer Metsera considers better. Pfizer described Novo Nordisk’s offer as “illusory,” warning it is “prepared to pursue all legal avenues to enforce its rights under its agreement.”
Thermo Fisher Scientific (No. 104) agreed to pay $8.88 billion for Clario Holdings, a company that helps collect, analyze, and manage clinical trial data. Thermo Fisher Scientific CEO Marc N. Casper wrote in a release announcing the acquisition that Clario will help the company perform “faster, more informed drug development.”
Eli Lilly (No. 100) is partnering with Nvidia (No. 31) to build its own supercomputer to process decades of medical data and help the company develop and test medicines. Diogo Rau, chief information and digital officer at Eli Lilly, said in a statement that the move will help the company “set a new scientific standard that accelerates innovation to deliver medicines to more patients, faster.”
Huntington Bancshares (No. 351) agreed to acquire Cadence Bank (No. 935 on the Fortune 1000), a regional bank managing $53 billion in assets across Texas and the South, as first reported by the Wall Street Journal. The announcement of the $7.4 billion deal comes just a week after Huntington completed its merger with Veritex Holdings, which also has a significant footprint in Texas.

Overheard

“We stepped back and we said, ‘We’ve got to get out of experimentation mode.’”

—Jim Fowler, CTO of Nationwide (No. 72), on why the company is focusing on 18 flagship AI use cases as it gears up to invest $1.5 billion through 2028 on AI and other tech initiatives.

On earnings calls:

Amazon (No. 2) beat expectations with $180.2 billion in net sales for the quarter, driven by a 20% year-over-year increase in revenue from the company’s cloud business, Amazon Web Services, and growth in its digital advertising business. The results came just days after the company laid off more than 14,000 employees.
Apple (No. 4) posted record sales for the quarter, even though iPhone revenue fell slightly short of expectations. CFO Kevan Parekh said the company expects next quarter to be its best ever, with 10% to 12% revenue growth year-over-year if holiday spending stays strong amid macroeconomic uncertainty.
Alphabet (No. 7) beat earnings expectations with $102.35 billion in quarterly revenue, with the company increasing its projected AI spend for the year to as much as $93 billion. The company saw 15% year-over-year growth in revenue from its Search business and other advertising revenue, and, according to CEO Sundar Pichai, the company’s Cloud business has a $155 billion backlog.
Microsoft (No. 14) experienced similar growth in its own cloud business, Azure, with revenue up 40% and pushing total revenue up 18% to $77.67 billion. The company also announced a $3.1 billion hit to its net income because of its investment in OpenAI.
Meta Platforms (No. 22)