18/12/2025

BIZ & FINANCE THURSDAY | DEC 18, 2025

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AI promised change – companies are still waiting

SAN FRANCISCO: Last spring, CellarTracker, a wine-collection app, built an AI-powered sommelier to make unvarnished wine recommendations based on a person’s palate. The problem was, the chatbot was too nice. “It’s just very polite, instead of just saying, ‘It’s really unlikely you’ll like the wine,’” CellarTracker CEO Eric LeVine said. It took six weeks of trial and error to coax the chatbot into offering an honest appraisal before the feature was launched. Since ChatGPT exploded three years ago, companies big and small have leapt at the chance to adopt generative artificial intelligence (AI) and stuff it into as many products as possible. But so far, the vast majority of businesses are struggling to realise a meaningful return on their AI investments, according to company executives, advisers and the results of seven recent executive and worker surveys. One survey of 1,576 executives conducted during the second quarter by research and advisory firm Forrester Research showed just 15% of respondents saw profit margins improve due to AI over the last year. Consulting firm BCG found that only 5% of 1,250 executives surveyed between May and mid-July saw widespread value from AI. Executives say they still believe generative AI will eventually transform their businesses, but they are reconsidering how quickly that will happen within their organisations. Forrester predicts that in 2026 companies will delay about 25% of their planned AI spending by a year. “The tech companies who have built this technology have spun this tale that this is all going to change quickly,” Forrester analyst Brian Hopkins said. “But we humans don’t change that fast.” AI companies including OpenAI, Anthropic and Google are all doubling down on courting business customers in the next year. During a recent lunch with media editors in New York, OpenAI CEO Sam Altman said developing AI systems for

o Early adopters find chatbots powerful but fragile, requiring extensive tuning, clean data and human oversight to create value

customer service were supposed to be heavily disrupted by AI, but companies quickly learned there are limits to the amount of human interaction that can be delegated to chatbots. In early 2024, Swedish payments company Klarna rolled out an OpenAI-powered customer service agent that it said could do the work of 700 full-time customer service agents. In 2025, however, CEO Sebastian Siemiathowski was forced to dial that back and acknowledge that some customers preferred to talk with humans. Siemiathowski said AI is reliable on simple tasks and can now do the work of about 850 agents, but more complex issues quickly get referred to human agents. For 2026, Klarna is focused on building its second-generation AI chatbot, which it hopes to ship soon, but human beings will remain a big part of the mix. “If you want to stay customer obsessed, you can’t rely [entirely] on AI,” he said. Similarly, US telecommunications giant Verizon is leaning back into human customer service agents in 2026 after attempts to delegate calls to AI. “I think 40% of consumers like the idea of still talking to a human, and they’re frustrated that they can’t get to a human agent,” said Ivan Berg, who leads Verizon’s AI-driven efforts to enhance service operations for business customers, in a Reuters interview this fall. The company, which has about 2,000 frontline customer service agents, still uses AI to screen calls, get

information on customers, and direct them to either self-service systems or to human agents. Using AI to handle routine questions frees up agents to handle complex issues and try new things, such as making outbound calls and doing sales. “Empathy is probably the key thing that’s holding us from having AI agents talk to customers holistically right now,” Berg said. Shashi Upadhyay, president of product, engineering and AI at customer-service platform Zendesk, says AI excels in three areas: writing, coding and chatting. Zendesk’s clients rely on generative AI to handle between 50% and 80% of their customer-support requests. But, he said, the idea that generative AI can do everything is “oversold.” Large language models are rapidly conquering complex tasks in math and coding, but can still fail at comparatively trivial tasks. Researchers call this contradiction in capabilities the “jagged frontier” of AI. “It might be a Ferrari in math but a donkey at putting things in your calendar,” said Anastasios Angelopoulos, the CEO and co founder of LMArena, a popular benchmarking tool. Seemingly small issues can unexpectedly trip up AI systems. Many financial firms rely on data compiled from a broad range of sources, all of which can be formatted very differently. These differences might prompt an AI tool to “read patterns that don’t exist,” said Clark Shafer, director at advisory firm Alpha Financial Markets Consulting. – Reuters well as multiple clinical programmes from Metsera. Pfizer was the first major pharmaceutical company to sign a deal with the Trump administration to lower the price of its prescription drugs in the Medicaid programme in exchange for three years of tariff relief. The company said the Medicaid discounts would result in price and margin compression next year. US vaccines have been under pressure since vaccine-skeptic Robert F. Kennedy Jr became health secretary and has worked to reduce the country’s reliance on the interventions. CEO Albert Bourla called the government’s vaccine position “clearly an anomaly” and said it will continue investing in vaccines. Pfizer also said it will create a new hospital and biosimilars unit. Bernstein’s Breen called the move “the first signs of disposing of the hospital and biosimilar business.” Pfizer revised its revenue forecast for 2025 to about US$62 billion from the previous range of US$61 to US$64 billion. It maintained its adjusted profit outlook for the year. – Reuters

to enjoy them. “We had to bend over backwards to get the models (any model) to be critical and suggest there are wines I might not like,” LeVine said. Part of the solution was designing prompts that gave the model permission to say no. Companies have also struggled with AI’s lack of consistency. Jeremy Nielsen, general manager at North American railroad service provider Cando Rail and Terminals, said the company recently tested an AI chatbot for employees to study internal safety reports and training materials. But Cando ran into a surprising stumbling block: the models couldn’t consistently and correctly summarise the Canadian Rail Operating Rules, a roughly 100-page document that lays out the safety standards for the industry. Sometimes the models forgot or misinterpreted the rules; other times they invented them from whole cloth. AI researchers say models often struggle to recall what appears in the middle of a long document. Cando has dropped the project for now, but is testing other ideas. So far the company has spent US$300,000 on developing AI products. “We all thought it’d be the easy button,” Nielsen said. “And that’s just not what happened.” Human-staffed call centres and

companies could be a US$100 billion market. All this is happening against the backdrop of unprecedented tech investment in everything from chips, to data centres, to energy sources. Whether these investments can be justified will be determined by companies’ ability to figure out how to use AI to boost revenue, fatten margins or speed innovation. Failing that, the infrastructure build-out could trigger the kind of crash reminiscent of the dot-com bust in the early 2000s, some experts say. Soon after ChatGPT’s launch, companies worldwide created task forces dedicated to finding ways to embrace generative AI, a type of AI that can create original content like essays, software code and images through text prompts. One well-known issue with AI models is their tendency to please the user. This bias – what’s called “sycophancy” – encourages users to chat more, but can impair the model’s ability to give better advice. CellarTracker ran into this problem with its wine recommendation feature, built on top of OpenAI’s technology, CEO LeVine said. The chatbot performed well enough when asked for general recommendations. But when asked about specific vintages, the chatbot remained positive – even if all signals showed a person was highly unlikely

Pfizer sees tougher outlook as Covid sales drop NEW JERSEY: Pfizer said Tuesday the next few years will be bumpy, beginning with 2026, due to lower sales of its Covid vaccine and treatment, price cuts promised to the US government, and the expiration of patents on key drugs. The stock fell 5.2% on Tuesday. Pfizer shares have dropped more than 50% since early 2023 as demand for Covid vaccines and treatments waned, leaving the company trailing peers in performance. analyst Courtney Breen. The drugmaker expects 2026 adjusted profit per share to be between US$2.80 and US$3, below analysts’ average estimate of US$3.05 per share, according to data compiled by LSEG. It expects revenue for next year in the range of US$59.5 billion to US$62.5 billion, compared with estimates of US$61.59 billion.

The projection includes a drop in revenue from its Covid-19 products of about US$1.5 billion from this year. The company also expects a revenue hit of about US$1.5 billion due to certain products losing exclusivity in 2026. The company said it exceeded its expectations for cost reductions in 2025 and is on track to deliver most of the savings next year. It expects 4% operational revenue growth, which excludes Covid products and those that are set to lose patents. “This core guidance is slightly above our expectations ... we would not be surprised to see modest EPS upside through the year on better cost management/the company’s ongoing restructuring efforts,“ said

The drugmaker does not expect to return to revenue growth until 2029, as it works to develop new blockbuster drugs, including the obesity treatments it picked up in recent deals. Its pipeline has not produced a game-changing drug since it helped to develop the Covid vaccine Comirnaty and produced Covid treatment Paxlovid early in the decade. The company’s goal is to save more than US$7 billion (RM29 billion) annually through 2027 as it tries to control costs. “This stock is unlikely to break out of its current mid-20s price range until investors are convinced of a growth trajectory,“ said Bernstein

Pfizer forecasts lower profits and flat growth in the coming years as it works to rebuild its drug pipeline and rein in costs. – UNSPLASH PIX JPMorgan analyst Chris Schott in a research note. to gain a foothold in the fast-growing obesity market and a US$43 billion deal for Seagen in 2023, among other licensing deals.

Pfizer, which expects to return to growth in 2029-2030, sees the growth being underpinned by its acquisitions and drug pipeline, its finance chief Dave Denton said. The drugmaker has pursued several deals in recent years to refill its pipeline, including last month’s US$10 billion acquisition of Metsera

The company expects full-year 2026 adjusted R&D expenses to be in the range of US$10.5 billion to US$11.5 billion – US$500 million higher at either end than the 2025 estimate – due to development of an antibody in-licensed from 3SBio as