What's up: Companies begin to see a return on AI agents; Meta AI pioneer has discussed leaving; AI megadeals break new ground on Wall Street.

Good morning. Board directors say artificial intelligence is transforming business faster than any technology they’ve seen, but consensus on how to steer the board through these times remains elusive. How fast? Some companies are already beginning to see a return on AI agents. More on that below.

We caught a glimpse of the challenge Tuesday at the WSJ Leadership Institute’s inaugural Board of Directors Council Summit in Palm Beach, Fla. where board members from some of America’s largest corporations discussed how best to lead with authority in a time where traditional processes are being disrupted.

Some called for “ruthless” internal change and open argument. Others urged caution and measured adoption. Below, some highlights:

Large companies are under threat like never before, said Dan Schulman, chief executive of Verizon Communications and a board director at Cisco Systems and Lazard.

"We're going to go into a world of change right now, and we're going to have new competition coming who are not afraid  to utilize the technologies. It costs fractions of what it used to to start companies. You'll have. companies with 100 people that will be doing multiple billions of dollars of revenues easily."

And the nature of the board itself needs to change to meet the challenge. Companies, and the boardroom, need to become more “argumentative” to keep pace with external disruption, said Schulman.

"We can't steer the boat by the wake of the boat anymore because that is probably the biggest impediment to future success. So I think all forms of the culture within a boardroom need to change in these next five years because these next five years are going to be like nothing we have seen before."

Carolyn Everson, a director at Coca-Cola, sportswear company Under Armour and Walt Disney and a senior adviser at private-equity firm Permira, agreed, saying “a sense of urgency” is a necessity in the age of AI, along with “being completely dissatisfied with status quo and complacency.”

"I think you have to push and boards have to understand, in my view, that there are going to be pretty big decisions that are going to feel very risky."

But moderate accordingly, suggested Alex Gorsky, a director at JPMorgan Chase, Apple and International Business Machines and former chairman and CEO of Johnson & Johnson. Sometimes the board’s role is to slow down a company that might be putting itself in risky territory by moving too fast with particular use. 

"Overall, we need to move faster, but it needs to be thoughtful [about] exactly where, when and how that’s being done... Be careful about not being swayed by the crisis du jour…this is a long arc."

Boards need to address the fear and lack of confidence inside the organization as it relates to AI. That issue can be handled by helping the organization understand that AI can create that trifecta of “faster, better, cheaper” but also that it can contribute to top-line growth as well as bottom- line efficiencies, said Ellen Kullman, a director at biotech Amgen, Carbon, Goldman Sachs and former chair and CEO of DuPont.

"You’re not really going to get credit for it in Wall Street unless they think it’s going to move your top line."

And of course, everything needs to move faster. "Most big companies think about how do you become 10% more successful next year, and  how do we drive EPS up 10%," said Schulman. "But I think instead of 10%, you have to think about 10x. Like how do we improve things by 10x? How do we do things 10x faster?"

🎥 Meg Whitman Calls AI the Biggest 'Gold Rush' of Her 40-year Career. Do today’s tech leaders truly understand the power—and responsibility—they wield?

🎥 Verizon CEO Dan Schulman: ‘We’ll Hit AGI in the Next 2–4 Years’. Calling the moment “unprecedented,” Schulman says AI models are improving every two months and predicts human-level intelligence will emerge sooner than most expect.

🎥 The Opportunity and Risk in the Tech Revolution. Alex Gorsky and Ellen Kullman explore how directors can oversee investments and expansion in AI while ensuring transparency, accountability, and risk management.

Skepticism remains high about whether AI spending will yield real business value. Should companies wait for AI technology to mature, minimizing risk and cost, or jump in early?

WSJ Leadership Institute's Steven Rosenbush looks at two examples that point to a possible first-mover advantage. Early into their work with AI agents, BNY and Walmart are already producing measurable results.

Leigh-Ann Russell, chief information officer and global head of engineering at BNY, said the financial services provider has “117 solutions [including agentic] touching everything that happens at the bank and we’re seeing really, really tangible outcomes that impact our bottom line in terms of growing capacity.”

Russell said the company has about 100 “digital employees” that possess their own distinct login credentials, communicate via email or Microsoft Teams, and report to a human manager.

Walmart uses AI agents to help source products, informed by trend signals such as what teenagers are buying at the moment, according to Vinod Bidarkoppa, executive vice president and chief technology officer at Walmart International.

Moving on from yesterday's news. BNY’s Russell referred to a Massachusetts Institute of Technology study that generated headlines last August because it reportedly found most generative-AI pilot projects had failed to generate meaningful returns. “For us, that’s a hard false,” Russell said. MIT didn’t respond to a request for comment.

Yann LeCun, the artificial-intelligence pioneer and Turing Award winner who led Meta Platforms’s AI efforts for more than a decade, has talked to associates about leaving Meta and launching a startup, WSJ reports.

The startup would focus on developing so-called world models, a different path from the large language models that Meta is now pursuing as an avenue to superintelligence.

LeCun’s departure would mark the end of an era for Meta’s long-term AI research division which has dwindled in recent months as Meta pours more resources into its teams chasing superintelligence.

LeCun has become one of the biggest skeptics that LLMs could lead to superintelligence. Instead, he has advocated for AI models based on real-world data inspired in part by how babies learn basic physics.

America’s chip restrictions are biting in China

Shortages of advanced semiconductors are so acute that the government has begun intervening in how the output of China’s largest contract chip maker, Semiconductor Manufacturing International, is distributed, WSJ reports.

DeepSeek had to delay the release of its latest model earlier this year because of a shortage of chips, people familiar with its operations said. Meanwhile companies in China also continue to smuggle Nvidia chips or access them remotely in other countries using cloud computing.

AMD CEO Lisa Su said on Tuesday that the company’s overall revenue growth would expand to about 35% per year over the next three to five years, driven by “insatiable” demand for AI chips. Su said that much of that would be captured by the company’s AI data center business, which it expects to grow at about 80% per year over the same time period, on track to hit tens of billions of dollars of sales by 2027, CNBC reports.

"Frankenstein" comes to mind when studying the bolted-on financial components used to fund some of the biggest AI projects.

Consider Project Beignet, a deal that combines elements of private-equity, project finance and investment-grade bonds to fund Hyperion, Meta's giant data center in Louisiana, WSJ reports. As part of the arrangement, deal fund manager Blue Owl Capital is buying private equity in the deal and is receiving a debt-like guarantee from Meta if the partnership falls apart.

Blue Owl Capital is also ramping up its big bet on AI with a roughly $3 billion investment in a New Mexico data center that’s part of OpenAI’s Stargate project, a person with knowledge of the deal told The Information.

Microsoft and Google said they would invest more than $16 billion to expand AI infrastructure in Europe, the latest spending commitment from U.S. tech giants in their bid to bolster AI capacity overseas. Microsoft said more than $10 billion in funding would go toward a data-center hub in Sines in south-west Portugal, starting early next year. Meanwhile, Google said it would inject $6.36 billion to expand AI infrastructure and offices in Germany through 2029, WSJ reports

A $35 billion facility under development in South Korea could be the world’s first large-scale data center designed, built and run by artificial intelligence, WSJ reports. The investor group behind the project, Stock Farm Road, has partnered with AI developer Voltai to make AI the architect, manager and operator of the data center.

Humans will be involved.  But only as supervisors, with AI acting as the decision-maker, the firms said. If completed as envisioned, the data center is set to cost as much as $35 billion and pack up to 3 gigawatts of power.

The neocloud provider Nebius Group signed a deal worth about $3 billion with Meta to provide the Facebook owner with AI infrastructure over a five-year period, the company said on Tuesday, after it reported a more than fourfold rise in third-quarter revenue, Reuters reports.

Google is rolling out a new cloud-based platform that lets users unlock advanced AI features on their devices while keeping data private. The feature, virtually identical to Apple’s Private Cloud Compute, comes as companies reconcile users’ demands for privacy with the growing computational needs of the latest AI applications, The Verge reports.

This time it's personal. Weeks after a ransomware attack hit brewer Asahi Group, shipments currently are at just 10% of normal levels, Bloomberg reports.

The path for interest-rate cuts has been clouded by an emerging split within the central bank with little precedent during Federal Reserve Chair Jerome Powell’s nearly eight-year tenure. Officials are fractured over which poses the greater threat—persistent inflation or a sluggish labor market—and even a resumption of official economic data may not bridge the differences. (WSJ)

Fannie Mae watchdogs who were removed from their jobs had been probing if Trump appointee Bill Pulte had improperly obtained mortgage records of key Democratic officials, including New York Attorney General Letitia James, according to people familiar with the matter. (WSJ)

The White House is exploring new measures to curb the influence of proxy advisers and index-fund managers, wading into a hot-button debate raised by high-profile CEOs including Elon Musk and Jamie Dimon in recent months. (WSJ)

The U.S. Navy’s largest aircraft carrier arrived in waters near Latin America on Tuesday, expanding the American military’s buildup as the Trump administration seeks to ratchet up the pressure on Venezuelan President Nicolás Maduro. (WSJ)

The WSJ CIO Journal Team is Steven Rosenbush, Isabelle Bousquette and Belle Lin.

The editor, Tom Loftus, can be reached at thomas.loftus@wsj.com.