AI could cure cancer, and kill your job

So it was interesting to hear Vicki Brady, the boss of Australia’s $54 billion telco giant Telstra, announce how it was going to wield the AI magic wand as part of its five-year plan to transform the business and earnings profile.

A recent trip to the US, which included entry to the exclusive Microsoft CEO Summit, proved to be an eye-opener on AI’s current state-of-play.

“The pace and scale of change is just phenomenal … this is real now,” Brady says.

“Now the conversation is around agents. We see lots of potential across those areas … customer engagement, how we operate and manage our network, how we develop software and manage our IT environment, how it supports back of office for us where you tend to have manual processes.”

What is Agentic AI?

By ‘agents’ she means the hot new buzzword: Agentic AI. This refers to discrete AI tools that can handle a range of functions with minimal oversight.

Think of cybersecurity agents that automatically detect and respond to threats, or health assistants that can help with diagnostic, treatment and care management recommendations. Or, in Telstra’s case, create massive efficiencies in customer engagement while improving the quality of its service – hopefully.

In case you don’t understand the potential threat, Nvidia boss Jensen Huang recently referred to them as “digital employees”.

And keep in mind that Telstra has made a virtue of its massive blood-letting over the past two decades with job cuts at a pace only surpassed by your columnist’s own industry: media.

Telstra’s most recent T22 transformation strategy included 8000 fresh bodies out the door. So it was interesting to see how ambivalent Telstra was on AI-related job costs when asked by analysts, who are used to hard numbers from the telco.

“No one can predict exactly what our workforces will look like in 2030, but in our case, we believe our workforce will likely be smaller in 2030 than it is today,” was Brady’s tepid reply.

Telstra currently employs 32,000 staff doing everything from ditch digging to customer support and sales. It isn’t that Brady won’t be using every opportunity to replace staff with AI bots where possible, it is just too early to say how much it will need to leverage staff with AI rather than rely on AI alone.

It makes Telstra an interesting proxy for the AI revolution compared to the tech groups and services giants which are starting to take brutal measures as AI turns on its makers.

Recent job losses at Microsoft included teams of coders whose jobs can now be done by AI. Technical writers at Aussie tech giants like Canva are also having to find new careers.

Shopify’s boss may have merely been publicly stating what has become industry standard practice when he said recently that the group will only approve new hires if it can be shown the job cannot be done by AI.

It has led to extreme measures, like the highly paid staff from Aussie tech giants Canva and Atlassian taking union membership – just like Telstra’s ditch diggers.

But the overriding message across industries is that it is about growing the business with fewer new hires as the business expands.

“I like to think we can double in size with the workforce we have today,” Janet Truncale, global chief executive of EY, said at the recent Milken Institute annual conference on the impact of AI.

So how does this all work for Telstra with the disadvantage of incumbency and the need for massive investments to keep up with the insatiable demand for data from new applications like AI, augmented reality and live-streaming? Plus the fierce competition which limits the telco’s ability to charge higher prices.

Telstra plans on AI having a critical role in its aim to both grow revenue but also keep a lid on costs.

“This is not straightforward, driving positive operating leverage in a business like ours, which is a mature business,” Brady says.

“We’ve got to drive the top line, and we’ve got to drive real efficiency in our business. And that’s absolutely at the heart of the strategy.”

Even for the ditch diggers and maintenance staff, AI is already helping its infrastructure business cut the costly “truck rolls” for emergency maintenance problems and help “crush” the manual complexity of designing its high-speed networks.

To get an idea of the potential savings, managing and operating its various networks costs $1.5 billion annually. Software engineering and IT is another $1 billion annual cost.

And then there is the “big opportunity” – the $2 billion consumed every year on customer engagement in all its forms.

The job losses will be from the workers that companies like Telstra won’t need to hire, and – if it works – the costs will be handed on to customers if they are willing to pay for services tailored to their needs.

That big opportunity is more than just about containing costs. It starts with the digitisation of telecommunications networks which now allow companies like Telstra to leverage it as a product with its own value rather than a pipe, no different to your gas and water.

Customer offerings no longer need to be defined by maximum download speeds and buckets of data. With digitisation, services can be managed more discretely by software. And customer’s access to the network can become more bespoke and – hopefully – lucrative.

A food truck at a concert needs uninterrupted network access to ensure payments get through and are not swamped by selfies getting uploaded by its customers. How much would they pay for that?

Customer engagement needs to get much smarter to create differentiated offerings – like the right service for someone to stream movies, make business video calls, or scale bandwidth for peak sales periods at your business.

The job losses will be from the workers that companies like Telstra won’t need to hire, and – if it works – the costs will be handed on to customers if they are willing to pay for services tailored to their needs.

But let’s not kid ourselves, no one has any real idea how this will play out.

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