Hong Kong: She works 24 hours a day and doesn’t pay a mega salary: the company uses AI as CEO – and is very satisfied

March 23, 2023

According to its own statements, a software company from Hong Kong relies on artificial intelligence in the top executive floor. The parent company is very happy with its decision so far – because the virtual boss costs little and brings a lot.

If you ask an artificial intelligence like ChatGPT which professions will be automated first due to the rapid development of this technology, the software names the usual suspects: bank employees, journalists, drivers, service staff or customer advisors. But the often strictly analytical and emotionless thinking of an AI could also threaten the top management floors of large corporations – as a current example from a Hong Kong company shows.

My boss, the machine

The software company Fujian Netdragon Websoft, which develops games, has had an AI as its rotating CEO since August last year, as “The Hustle” reports. Her name is Tang Yu and she has been trained to conduct analyses, make managerial decisions, assess risks and organize work processes as efficiently as possible. The virtual boss shouldn’t look bad at all. While the Hang Seng Index – and with it numerous companies under human management – has turned slightly negative since August, the AI-controlled company has achieved an 18.2 percent increase in shares.

For the Chairman of the parent company, Dr. Dejian Liu, this is the future of enterprise management. According to a press release from Netdragon Websoft Holdings, “Tang Yu represents our commitment to truly leveraging the use of AI to transform the way we run our business and ultimately fuel our future strategic growth.”

What Liu doesn’t mention explicitly: With an AI in this position, he saves a lot of money. As “Zippia” determined a few months ago, the average salary of a CEO of the Fortune 500 companies is 15.9 million US dollars a year. If you divide that by last year’s median income in the United States, which was $54,132 according to First Republic Bank, a CEO’s salary is almost 300 times that of a normal employee. In extreme cases, such as Amazon’s Andy Jassy or Elon Musk, this comparison looks even more dramatic. The salary of the two corresponds to the income of thousands of average earners.

Maybe not a full replacement, but a useful addition

Against the background of countless mass layoffs in the tech industry, which turned the former paradise into a nightmare, the use of AI in high decision-making positions opens up completely different perspectives for company owners. Especially since you don’t have to pay any severance pay to an AI if you finally decide to turn off the computer.

However, it remains to be seen whether an AI can really completely replace a CEO. OECD economist Marguerita Lane explained to “The Hustle” that many components of corporate management cannot be automated, such as the ambassadorial function for common goals, negotiating skills or – very fundamentally – taking responsibility for decisions. But: The “Harvard Business Review” writes that around 25 percent of a CEO’s tasks could definitely be performed by machines. In the future, the boss may be provided with an AI that primarily takes over the analytical part of the work and facilitates performance-based decisions.