What's up: Stop worrying about AI ROI; AI turns corporate org charts upside down; AI buzz fuels Chinese tech rally; U.S. tech firms invest in U.K.

Good morning. I came away from the WSJ Leadership Institute’s Technology Council Summit this week with a deeper appreciation of how AI adoption is evolving, and how companies must adapt with it.

During a session with about 30 senior technology leaders, nearly half of the people in the room said their companies were employing AI agents, something that their organizations didn’t do last year. And everyone else in the room said they expected their organizations to begin the adoption of agents in the coming year.

It was a very different tone from our summit in February in Silicon Valley when the discussion of AI agents was more speculative. Now the question is how people and their organizations are going to evolve along with the technology. For business leaders, it’s the question, as complex and consequential as it gets.

See below for highlights from CIO Journal’s coverage.

She puts people and processes before technology, and the Japanese principle of kaizen—or continuous improvement—is driving much of her work to transform the decades-old organization into one that’s AI-first.

AI is turning traditional corporate org charts upside down.“We’re going to have to rewire the whole company,” said Sastry Durvasula, chief operating, information and digital officer at financial services organization TIAA. “Every role, what do they do? What’s the workforce of the future?” He added, “I believe that 80% of the jobs will change at least 20% by AI. And 20% of the jobs will change as much as 80%.”

Core to much reorganization is a refocus on individual contributors or staff who focus on getting actual work done rather than overseeing other people. The result will be fewer middle managers and a small cadre of leaders at the top managing a much larger number of employees than they had in the past. Jensen Huang, the Nvidia CEO, has said he oversees more than 50 people. Cross-disciplinary teams including engineers and business people will come together on an ad hoc basis, attack a problem, and move on to the next project.

Stop worrying about AI’s return on investment. Tech leaders said it’s nearly impossible to measure the impact of AI on business productivity. And when we try, we’re measuring it wrong.

“For the most impactful business opportunity or products, you have to use AI to really double down on innovation versus productivity,” said Sophia Velastegui, board director of BlackLine and former chief AI technology officer at Microsoft.

“Everything you can measure is kind of a proxy, but not the real thing, and anything you actually care about you can’t measure,” said Severin Hacker, co-founder and chief technology officer of language-learning app Duolingo said.

“It’s really important to balance the focus on a few key areas with experimentation and learning, and even taking some risks at times,” said Bryan Goodman, Ford’s director of AI. “At the end of the day, that’s where value is created.”

How is your organization evolving in step with AI? Use the links at the end of this email and let us know.

Welcome to the era of techno-diplomacy. Technology is an increasingly powerful strategic lever in trade negotiations, the primary channel through which power is exercised—or withheld—as this week's events show. 

Chip wars. Days after China cited violations in connection with Nvidia’s acquisition of an Israeli company, the country’s cyberspace regulator is telling companies to terminate orders for Nvidia's RTX Pro 6000D chips. FT reports that several companies had planned to order tens of thousands of the accelerators, designed to meet the U.S. government restrictions placed on shipping advanced AI chips to China.

Meanwhile, Beijing’s bid to reduce reliance on foreign tech is paying off, at least in the markets, with China’s tech rally showing no signs of slowing, WSJ reports. 

AI and internet giant Baidu on Wednesday led the charge in Hong Kong, sitting 16% higher—its biggest gain in over three years. E-commerce juggernauts climbed too, with Alibaba up 5.3%, Meituan rising 4.9% and JD.com trading 5.15% higher.

Social media shakeup. Concerns about Chinese control of TikTok, an app used by some 170 million Americans, led Congress to pass a law last year requiring the firm to do a deal or stop operating in America. 

Now a deal may be coming. The WSJ reports that the U.S. and China are finalizing a framework for TikTok’s U.S. business with a new app built for existing users in the U.S controlled by an investor consortium including Oracle, Silver Lake and Andreessen Horowitz.

U.S. tech firms shower billions on the U.K., days before President Trump's state visit. Microsoft said Tuesday that it would pour $30 billion into AI infrastructure and existing operations in the U.K. through 2028. Microsoft’s pledge comes hours after Google said it would spend about $6.8 billion in AI, research and development and related engineering in the U.K. over the next two years.

Also noteworthy, Nvidia, OpenAI and British company Nscale are joining forces to set up AI infrastructure, dubbed Stargate U.K., leveraging tens of thousands of Nvidia’s Grace Blackwell Ultra GPUs, WSJ reports.

Workday is acquiring Sana, an AI company focused on workplace tools, for $1.1 billion as part of a broader push to offer companies and their employees AI services. Workday said the acquisition will help it offer AI agents that customers can use to automate repetitive tasks.

Waymo has obtained permits to test at San Francisco International Airport, CNBC reports. The robotaxi service is already serving San Mateo County and nearby San Francisco.

AOL is not only still around, but generates around $400 million in annual earnings. The WSJ reports that owner Apollo Global Management, which bought the early internet darling in 2021 as part of a $5 billion deal to acquire that business and Yahoo from Verizon, is exploring a sale. Any deal could value AOL at around $1.5 billion.

With an interest-rate cut viewed as a near-certain on Wednesday, investors will focus on the Federal Reserve's rate projections through year-end and Chair Jerome Powell's stance when he answers questions on the economy. (WSJ)

There are two economies in the U.S. right now, and they are moving in different directions. For high earners and many older Americans, the economy looks robust. For many others, momentum has stalled or reversed. The big wage growth experienced by low-income workers during the pandemic has petered out. (WSJ)

GSK and Eli Lilly on Tuesday were the latest multinational drugmakers to unveil plans to build new U.S. manufacturing plants and other operations, moves aimed partly at mitigating the threat of tariffs on imported medicines by the Trump administration. (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.