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The Morning Download: Listening to Voice AI

By Tom Loftus

 

What's up: AI drives GDP’s upward revision; AI tech for a trashy culture; Alibaba develops new AI chip.

Taco Bell will work with restaurants to figure out the best use for AI, and when a human might be better. Photo: Justin Sullivan/Getty Images

Good morning. AI may have finally found its limits serving tacos. Since last year, Taco Bell has rolled out voice AI-powered ordering at more than 500 drive-through locations.

Not everyone is a fan. Some have taken to social media to complain about glitches and delays. Others are simply just weirded out. And then there is a contingent intent on trolling the system with orders like, “18,000 cups of water, please.”

“We’re learning a lot, I’m going to be honest with you,” Dane Mathews, Taco Bell’s chief digital and technology officer, told the WSJ Leadership Institute’s Isabelle Bousquette.

It isn’t the first time a retail chain has experienced bumps with voice AI. Last year, McDonald’s ended an experiment with International Business Machines aimed at making it work. Chief Information Officer Brian Rice told The Wall Street Journal earlier this year that he is now working on it with Google Cloud.

Taco Bell is not giving up on voice AI, but after working to provide the capability at significant scale, it’s finding that the technology is not the answer to all problems all the time. 

Mathews tells WSJLI that he is thinking carefully about where and where not to use this tech in the future. It might not make sense to exclusively use artificial intelligence at every drive-through, he said.

Three years since generative AI took over the collective mindhive, companies are deep enough into their pilots and projects to realize that getting value from AI involves more than flipping a switch.

As we reported earlier this year, 78% of companies said they used AI in at least one function, according to global management consulting firm McKinsey’s State of AI survey. From these efforts, companies claimed to typically find cost savings of less than 10% and revenue increases of less than 5%.

Within that context, the recalibrations of AI efforts at companies like Taco Bell are not so much unexpected failures, but something to be accepted as leaders go through the complex and often messy processes of learning from experience. Read the story.

 
Content from our sponsor: Deloitte
Order Up: How AI Is Delivering for Restaurants

AI is already proving its value in the restaurant industry, with early benefits in customer experience and inventory management. Identifying scalable use cases remains a challenge. Read More

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Note to Readers

The Morning Download will not be published on Monday due to the Labor Day holiday. We will resume publication on Tuesday.

 

AI Drives GDP’s Upward Revision

Gross domestic product expanded at a seasonally and inflation-adjusted annual rate of 3.3% in the quarter, the Commerce Department said in an updated estimate Thursday. The department had previously said the economy grew by 3%.

“The upward revision in intellectual property investment was driven by software, research and development, the Commerce Department said. The figures show “increasingly concrete signs of an AI-related boom in tech investment,” Capital Economics chief North America economist Paul Ashworth wrote in a note.

Software investment grew at the fastest annualized quarterly rate since at least 2007, he added. The booming artificial intelligence industry has been a major contributor to economic growth in recent years as companies invest heavily in things such as memory chips and data centers.”

A billion here, a billion there. President Trump this week may have broken news on a giant data center Meta Platforms is planning for Louisiana. "When they said '$50 billion for a plant,' I said, 'what the hell kind of a plant is that?'" Trump said in a cabinet meeting, according to NOLA.com. Earlier accounts of the facility carried a $10 billion estimate.

Google plans to pour another $9 billion into Virginia through 2026 as it boosts AI capabilities. The capital expenditures will go towards expanding new campuses as well as a new data center in Chesterfield County.

GDP on the blockchain. The U.S. Thursday began sharing GDP data on not one, but nine different blockchains, including those from Ethereum and Solana, marking the Trump Administration’s ongoing push for cryptocurrency technologies, Bloomberg reports.

More on the AI economy. The FT talked with Hemant Taneja, CEO of General Catalyst about his AI roll-up strategy, in which the firm incubates and acquires businesses and uses AI to improve their workforce productivity, and whether or not there is an AI bubble.

“Bubbles align capital and talent in a new trend, and that creates some carnage, but it also creates enduring, new businesses that change the world. It happens in every bubble," he said. "The thing that makes it peak ambiguity right now is, in the previous trends, you sort of knew what those technology trends were invoking and what the role of the companies driving those trends was.”

The Morning Download respectfully nominates “Peak Ambiguity” as the phrase of the year. Thank you, Hemant Taneja.

 

ILLUSTRATION: BEN VOLDMAN

Trashy AI

Americans are among the top producers of trash per capita. Most also don’t recycle regularly, making for an opportunity-rich combination that tech was born to answer.

AI Slop. The WSJ reports on how some sanitation engineers are promoting something called the single-stream model, where residents throw everything into one trash bin and later, a remote facility, AI-powered cameras and robots sort the refuse, diverting those items that can be recycled. Many large municipalities already use single-stream—though only for recycling and not other waste.

Uber…but for trash. Some cities are moving toward containerization: large, centralized bins shared by a street or neighborhood. Don’t want to schlep your garbage to the spot? Machinery manufacturers such as Wisconsin-based Oshkosh are developing small self-driving robots that can be ordered on demand, like Uber, for trash pickup.

 

An Alibaba building in Nanjing, China Photo: Cfoto/DDP/ZUMA Press

Today's Reading List

Chinese chip companies and artificial-intelligence developers are building up their arsenal of homegrown technology, backed by a government determined to win the AI race with the U.S, WSJ reports. The latest example: China’s biggest cloud-computing company Alibaba said it has developed a new chip that is more versatile than its older chips.

TransUnion in a regulatory disclosure said the data of more than four million of its customers stored on “a third-party application” were compromised in a breach, Bloomberg reports. No credit information was accessed, the credit reporting firm said.

Tesla sales plunged 40% in Europe in July even as overall EV sales rose, with China’s BYD among the winners, CNBC reports.

The FTC chairman is pressuring Google to stop throwing certain emails sent by Republicans into the spam folder. A Google spokesperson tells Axios that Gmail looks at a variety of signals, including “if a particular ad agency is sending a high volume of emails that are often marked by people as spam."

 

Las Vegas Sphere lights up with an advertisement for "The Wizard of Oz at Sphere". Photo: Ethan Miller/Getty Images

There's No Place Like Las Vegas (For an AI-Powered 'Wizard of Oz')

LAS VEGAS -- This month’s tornado of an AI news cycle last night took me straight to Oz.

Earlier this year, I reported how “The Wizard of Oz”, originally filmed in 1939 on a 35mm camera, was being reimagined for the Las Vegas Sphere’s 160,000-square-foot curved, immersive screen. It worked with Google Deepmind and Google Cloud, who, together, enhanced the resolution and extended backgrounds to now include characters and scenery not in the original shots.

After experiencing the AI-enhanced film at the Sphere on Thursday, I can confirm that the ruby slippers were still mesmerizing, poppy fields were still famously soporific, and flying monkeys were honestly never not creepy.

At the same time, this wasn’t your mother’s Oz. There were flames and apples falling from the sky, and scenes that went far beyond the visuals that appeared in the original.

Google used AI to generate new pixels to enhance the resolution of the original 1939 film. The new version on the right is compared with the original on the left. Photo: Sphere Entertainment

Have Google and the Sphere messed too much with the original though? That’s what a lot of readers thought when I first covered the project announcement back in April.

Before Thursday's showing, I touched upon that topic with Buzz Hays, Google Cloud’s Global Lead for Media & Entertainment Content Creation.

“In some ways you have to put yourself in the shoes of the person that made the film, wonder, would they have used the best technology available in the day to do what they did,” Hays said. “And the answer in this one is clearly yes.”

Hays noted the original film leaned into technicolor, which was a new and cutting edge technology at the time.

Right now “AI is this big scary thing,” he said. “but I do think when people see the experience, they will forget all of that stuff.”

Follow the Wall Street Journal Leadership Institute’s Isabelle Bousquette on LinkedIn, Instagram, and X for more behind the scenes tech tours.

 

Everything Else You Need to Know

The Trump administration plans to expand national-security tariffs on steel, aluminum and a variety of other industries in coming months in hopes of redirecting production in these sectors to the U.S. and thwarting potential legal threats in the trade war. (WSJ)

Senate Republicans expressed alarm Thursday at the abrupt firing of the head of the Centers for Disease Control and Prevention and pushed to delay a vaccine meeting scheduled for next month, reflecting growing concerns about the nation’s health policies overseen by Robert F. Kennedy Jr. (WSJ)

Companies including Hormel Foods, J.M. Smucker and Ace Hardware said this week they would raise prices for reasons ranging from higher meat costs to tariffs. Large retailers like Walmart, Target and Best Buy said some tariff-related price increases are already in place. More are on the way. (WSJ)

 

WSJ Technology Council Summit

This September, The WSJ Technology Council will convene senior technology leaders to examine how AI is reshaping organizations—redefining teams and workflows, elevating technology’s role in business strategy, and transforming products and services. Conversations will also delve into AI’s evolving security risks and other fast-emerging trends shaping the future.

Select speakers include:

Carolina Dybeck Happe, COO, Microsoft
Severin Hacker, CTO, Duolingo
Yang Lu, CIO, Tapestry
Tilak Mandadi, CTO, CVS Health
Helen Riley, CFO, X, Google's Moonshot Factory

September 15-16 | New York, NY
Request an invitation | Participants and program

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About Us

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.

 
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