Artificial intelligence (AI) is emerging as a general purpose technology (GPT) with the potential to transform industries. As a result, the potential benefits of AI give firms strong reasons to adopt it – but also provides opportunities to exaggerate their investments in it. Unlike previous GPTs such as the steam engine or electricity, which required
The CLS Blue Sky Blog
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Scaling Core Earnings Measurement With Large Language Models
Large language models (LLMs) are capturing headlines and users as AI researchers push the limits of their capabilities. Those of us who work on understanding and analyzing corporations, whether as practitioners or researchers, are presented with two practical questions: What can these models do for us that wasn’t previously possible (their upside), and when, how,…
Davis Polk Discusses Stablecoin Bill as Crypto Legislation Gains Momentum
With a new administration and Congress each expressing interest in pursuing a new regulatory framework for crypto, the prospects for federal stablecoin legislation are growing. On February 4, Sen. Bill Hagerty (R-TN) introduced the Guiding and Establishing National Innovation for U.S. Stablecoins of 2025 Act – the GENIUS Act – cosponsored by Senate Banking Chair…
Wachtell Lipton Discusses What Awaits M&A in 2025
By Wachtell, Lipton & Rosen And Katz
After a relative low in global M&A in 2023, the past year witnessed a moderate uptick as the pandemic receded further into the rear-view mirror, the U.S. economy stabilized, inflation declined (albeit with some renewed concern toward the end of the year), financing markets brightened, albeit modestly, and equity markets climbed ever higher. Global M&A…
A New Corporate Governance Paradigm for the AI Revolution
In a new article, I tackle the increasingly urgent question of how corporate governance principles must adapt in response to the transformative influence of artificial intelligence (“AI”). No longer just a tool for enhancing operational efficiency, AI now fundamentally alters how corporations make decisions, relate to stakeholders, and engage with society.[1] Traditional fiduciary corporate…
A New Theory of Purposeful Enterprise
In a new paper, we present a novel theory of “purposeful enterprise” to explain why nonprofit enterprises survive and thrive. We define nonprofit enterprises as nonprofits that generate revenue primarily through operations rather than donations.[1] Patagonia, Novo Nordisk, IKEA, Carlsberg, Anthropic, OpenAI (for now), and most hospitals and universities fall into this category.
Nonprofit…
Can Europe’s Digital Markets Act Tame Big Tech in the U.S.?
The digital economy has put antitrust regulation in the spotlight, with increasingly dominant technology companies – such as Amazon, Google, Facebook (Meta), Apple, and Microsoft – reviving concerns about private monopolies reminiscent of Standard Oil and AT&T. Yet the enforcement of antitrust principles in the digital world are far more complex than in traditional, non-digital…
What Firms Disclose About Their Use of AI
By Yang Cao, Miao Liu, Jiaping Qiu & Ran Zhao
The revolutionary potential of artificial intelligence (AI) creates substantial uncertainty about its impact on firm value. On one hand, AI can drive revenue growth through innovative products and precise customer targeting, while also reducing operational costs by automating tasks, optimizing supply chains, and improving production processes. On the other hand, AI comes with heightened risks,…
Cleary Gottlieb Discusses DOJ Guidance for Evaluating Antitrust Compliance Programs
On November 14, 2024, the U.S. Department of Justice (“DOJ”) Antitrust Division (the “Division”) released guidance for the Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations (the “Guidance”). The Guidance will be used by the Division in assessing the adequacy and effectiveness of a company’s antitrust compliance program when making a charging or resolution…
SEC Chair Gensler Speaks Before the Financial Stability Oversight Council
By Gary Gensler
Thank you, Secretary Yellen, for your leadership of this council these last four years. I also want to thank my fellow council members and their staffs for the collaborative efforts we’ve all put in to ensure that the risks in our financial sector don’t spill out and hurt everyday Americans.
Today’s formal agenda includes a…