UBS, THE INSUFFICIENT AI VALUE CHAIN, AND THE IMPORTANCE OF BUYING SWISS AI
What UBS got wrong about AI. AI is a foundational technology. It will improve workflows. Building in-house AI capabilities is essential. Switzerland also needs to create an entire AI value chain.
(Picture from LinkedIn)
In mid-November 2024, Sergio P. Ermotti, CEO of UBS Bank and the best-paid bank CEO in Europe, released a video announcing that the bank would roll out Microsoft’s AI Co-pilot to 50,000 employees. He continued to state that this would ensure UBS’s innovation capability.[1] What sounded amazing initially triggered some heated debates among AI experts.
The criticism was squarely aimed at the lack of ambition by just deploying a US tech giant’s off-the-shelf technology. UBS tried to make rolling out a new Microsoft app sound amazing. It is a bit like announcing that they will now use Teams Calls.
I agree fully.
For months, I have been interviewing leading AI experts in Switzerland.
What became clear is that Generative AI is quickly becoming a foundational technology, like email or cloud services.
Generative AI’s capability to understand unstructured text and intent makes it a perfect orchestrator for various workflows. In addition, its no-code approach lets an entire organization, not only the IT departments, do pilots and test use cases. It is a genuinely empowering technology that goes to the core of a company’s value chain.
Using Microsoft’s AI capabilities, UBS is handing over a key competence and value driver of its business to Microsoft. Microsoft will learn how to optimize banking processes and create new use cases. While using an off-the-shelf product is clearly an easy and low-risk approach, I firmly believe that UBS does not understand the transformational potency of Generative AI.
What could UBS have done instead?
Building in-house AI capabilities is a critical competitive advantage.
As I will explain in my upcoming book about Switzerland’s world-leading AI ecosystem, the country has a vast homegrown talent pool, including amazing startups.
(Picture: Startupticker.ch)
One is Unique, which has developed its own FinanceGPT and finance chatbot, which several banks, such as Pictet, LGT, and PostFinance, use. Together with its clients, Unique is continuously developing its AI capabilities, from chatbots to AI assistants.
This has two significant effects: First, the clients are co-developing the AI platform and building internal capabilities. Second, it is strengthening Swiss AI capabilities and the AI startup ecosystem.
Besides building in-house AI capabilities, UBS could have financially supported the local AI ecosystem. In 2022, UBS announced it would invest a decent CHF 20 million over ten years into ETH University. The focus is entrepreneurship and innovation.[2] Before that, UBS financed the UBS Center for Economics in Society at the University of Zurich. UBS should now do the same thing, but more significantly, it should support the Swiss AI Center, a joint effort by the leading universities ETH and EPFL.[3] It would strengthen the Swiss AI ecosystem, develop talents, and create future AI products for UBS to deploy.
Make Swiss AI great by buying locally!
The global AI race is all about capital—capital for AI chips, data centers, talent, training algorithms, and product distribution. Just look at how OpenAI combined an entire value chain to become the leader in enterprise AI.
Having outstanding AI research, great AI talent and exciting AI startups is insufficient to compete in the global AI race. It is about building an entire AI value chain, from education, infrastructure, and corporate buying from local AI companies.
UBS should be a leader and buy Swiss AI!
Any startup needs funding and clients to scale. As Switzerland’s biggest bank, UBS has the moral duty to support the local AI ecosystem by buying Swiss technology instead of relying on US technology.
Switzerland has the talent and capabilities of cutting-edge AI startups, such as Unique, with its FinanceGPT, the Swiss supercomputer ALPs, and world-leading universities, such as ETH and EPFL.
What is direly lacking is the willingness of large corporations and the government to tap into this talent pool.
We need to build capital and AI capabilities instead of buying foreign products. We need to develop the Swiss AI value chain.
UBS should buy Swiss AI. The entire Swiss business community should buy Swiss AI!
[1] https://www.linkedin.com/posts/sergiopermotti_ubs-to-roll-out-50k-microsoft-copilot-licensesmp4-activity-7261706494696476672-fcwT/
[2] https://ethz.ch/de/news-und-veranstaltungen/eth-news/news/2022/08/eth-und-ubs-lancieren-partnerschaft-zur-foerderung-von-innovation-und-unternehmertum.html
[3] https://ethz.ch/en/news-and-events/eth-news/news/2024/10/eth-zurich-and-epfl-enhance-collaboration-to-boost-ai-in-switzerland.html