Investor relations pros, are you ready to shake things up? Generative AI is here, and it's the disruptive tool you need to take your communication strategy to the next level.
That opening, as you might have guessed, was written by ChatGPT. After tossing off a few long-winded and generic ledes, this much-talked-about AI tool responded in seconds flat to the request to be edgier and pithier.
Interested in accompanying artwork? When Microsoft Bing was asked to illustrate this article on “how generative AI can help investor relations professionals,” it produced four options (shown below) faster than the average adult could draw a stick figure.
Source: Microsoft Bing Image Creator
These Bing illustrations suggest that generative artificial intelligence (AI) can produce extremely competent results, but is that reason enough to hand over the keys to AI?
Not so fast, say IR professionals and AI enthusiasts alike.
Understanding the New AI
Generative AI, according to McKinsey, “describes algorithms (such as ChatGPT) that can be used to create new content, including audio, code, images, text, simulations and videos.” [https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-generative-ai]
In these early days of generative AI – ChatGPT only went live on November 30, 2022 – the IR world is divided among enthusiasts, skeptics, and those suspending judgement for a while.
Jean Marc Ayas, Senior Director of Investor Relations at Dialogue, a leader in telemedicine, falls between the first and third camps.
Knowing he wanted to experiment with generative AI, Ayas looked for a straightforward task on his to-do list and settled on crafting his company’s first-ever ESG policy.
Initially, Ayas found that the technology produced something lacklustre, but the draft steadily improved as he refined his requests. By feeding ChatGPT more specific instructions, such as creating separate paragraphs for each of the company’s five focus areas, the document began to resemble what he’d envisioned. After 25-to-30 minutes of back and forth, he had a nearly two-page document that he could revise and polish.
“ChatGPT was good for establishing that initial research that could have taken a day or two or three,” he says.
“A lot of IROs haven’t looked at ChatGPT,” he continues. “You have professionals out there saying: ‘I don’t want to find out that this can replace me. Because if this can replace me, I’m going to go home and cry.’”
The Upsides
Putting paid to writer’s block is a nice benefit of the new AI tools out there – and one of the first advantages cited by IROs.
“Instead of starting with a blank page, I can get some kind of framework for writing speeches, scripts, and press releases,” says Quentin Weber, Senior Advisor, Investor Relations, for WSP Global in Montreal. “I might ask ChatGPT to write a paragraph on the current macroeconomic conditions, and it gives me an idea that I can leverage and then add my touch.”
Another plus, suggests Weber, is the efficiency of using AI to summarize what happened within an earnings transcript or at an investor day.
Amit Sanghvi, Global Vice President, Capital Markets Platform for Q4 Inc., agrees, noting that AI tools could also shave time off the task of inputting notes into CRM (customer relationship management) tools after one-on-ones with institutional investors.
“IROs love what a CRM can do for them, but using a CRM is very tedious work that nobody likes,” says Sanghvi. “With AI, there’s a potential to really simplify the usage of a CRM.”
AI is also a game changer for IROs when it comes to researching competitors.
Too often, says Sanghvi, critical corporate information is tucked away in an odd corner of a website. Asking an AI chatbot to identify the top three things a company is doing in terms of, for example, international expansion yields answers fast.
Finally, Sanghvi envisions enormous benefits if AI-powered chatbots were to identify the questions visitors to your website ask. “Say you know an investor came to your website and asked three specific questions,” says Sanghvi. “You could spot gaps in your communication, and if you have a roadshow coming up, you’d know what you’d better highlight at the top of the messaging.”
Exploring the Downsides
Nearly every article on generative AI points out that the technology is in its infancy and the information provided is sometimes flat-out wrong.
For these reasons, Dialogue’s Ayas urges caution. “Generative AI can set the table, but I must do the work after that,” he says. “Everything needs to be fact checked and then you can decide what’s useful and what’s not.”
Another drawback is that the underlying data is often stale. With ChatGPT, for instance, the algorithm relies on data from 2021 and earlier.
“With investor relations, you always have to be on the forefront of the latest information, data, metrics, and trends in an industry and in macroeconomics and the geopolitical,” says Daniela Trnka, a senior-level IR practitioner working as an independent consultant in Calgary. “ChatGPT is limited, and it can’t yet drive current real-time insights,” she notes.
On the other hand, Trnka is confident that AI tools will improve rapidly – a prediction borne out by the rapid release of new versions of ChatGPT and other AI bots.
Another serious concern is AI and selective disclosure. “If I input nonpublic information in ChatGPT, or any other AI tool, where is that data going?” asks WSP’s Weber.
No one seems to know for sure. And for that reason, Weber warns against summarizing information from private meetings in public AI tools.
The selective disclosure risks may become moot once large companies commercialize their own private versions of ChatGPT in which access can be restricted. Meanwhile, third-party solutions are almost certain to arise with proprietary offerings tailored to a specific audience.
Take AlphaSense, a market intelligence platform that launched Smart Summaries, its own generative AI application for IR and other professionals. CEO and Founder Jack Kokko told IR Leader that users can “summarize key insights instantly from large volumes of content, acting like a human analyst and giving every AlphaSense user ‘superhuman’ abilities.”
Other fears about the use of AI in IR revolve around human nature, specifically, the age-old desire to opt for shortcuts.
“Some IR professionals and individuals will push AI too far by asking an AI tool to generate the script for a CEO and then not review it,” says Weber. “There could be a trend where some companies are disclosing wholly AI-generated content.”
That AI-generated news could quickly spread on social-media boards, driving stock prices up or down, is an idea that Weber calls “scary.”
Although using AI rashly has frightening implications, this new technology also seems to spotlight the unique contributions a skilled IRO can make.
“In a world of AI, it justifies, even more, the need for an IR professional,” says Weber. “The role of an IRO is to create relationships with different stakeholders, and AI doesn’t have the capability to create human relationships.”
Stop Reading and Try ChatGPT
Love AI or hate it, most people agree that the best way to understand these tools is to try them.
“Just open up a ChatGPT account and start asking questions,” advises Sanghvi. “Play around with it, maybe not even for professional purposes. Until you do, you won’t understand what it’s capable of.”
What surprises many first-time users is the intimacy of the experience. AI tools mimic human interactions in a way that can be disarming, spurring users to anthropomorphize and make requests full of the 'pleases' and 'thank yous' that grease daily interactions with coworkers.
Letting the lines between human and machine blur may not be a terrible thing.
“Now that I’ve tested ChatGPT and seen how it works,” says Ayas, “my advice would be to treat it like a human. As scary as that sounds, treat it like someone you work with, like a junior associate. Essentially, ChatGPT is acting like a researcher on your staff who can pull out articles and topics and data for you.”
Thinking of an AI tool as a colleague may be a foreign concept, but the entire AI experience is propelling IROs to ask themselves some unexpected questions.
“In a world where you eliminate a lot of the low-value tasks, what become the high-value tasks?” asks Ayas. In such a world, he says, “advising your CEO, your CFO, and your Board of Directors begins to take up more space.”
Although AI is prompting far more questions than answers, Ayas concludes by hazarding this educated guess about what IR tasks may emerge as extremely valuable in the coming months and years. “I think,” he says, “AI tools will push investor relations to be more strategic in the future.”
Beyond ChatGPT: Five Tools Worth Trying
SlidesAI: List the number of slides you’d like to generate with the number of bullet points per slide, then specify the tone (educational, entertaining). This tool will create a slide deck in seconds, and slides can even be customized according to your company’s branding.
Pictory: An AI tool for taking long-form video and making short, shareable video clips.
Legal Robot: Tired of wading through legalese? This AI tool, which will soon be available, can translate legal terms into plain English and can even analyze contractual language.
Bing: Billed as your “AI-powered copilot for the web,” Bing has many capabilities, including an image creator that can generate illustrations in a specified style.
Fireflies: An AI tool for recording, transcribing, searching, as well as analyzing voice conversations.
(And in case you’re wondering, the suggestion to try these tools is purely human generated!)