Good morning and welcome to another edition of Kamyogi Talks. We have a very special guest today who's joining us from the US. Almost everyone in India and around the world has heard of Dean Nitin Nohria. Nitin has been the dean of Harvard Business School for 10 years, is a recipient of the Padma Shri in the latest round of Padma awards, and has had a very distinguished career in business. He graduated from IIT Bombay, then did his PhD in management from MIT and joined Harvard Business School faculty in 1988. He has lost track of how many books he's written, but I know he's written a large number on many areas, looking at leadership, innovation, the development of the US economy over the last 100 years, the evolution of large companies in the US. He also spent a lot of time in India working with companies like the Tatas, at Piramal, and on the board of some of the best companies around the world, truly a who's who, including Britspan, MGB, ABI, Alsim, etc. He's also been involved in Thrive Capital, which has been one of the major investors in AI. So I think you've had a very broad view of how the world is evolving and how business is evolving, and we really look forward to talking with you about that.
That was an extraordinarily warm introduction. Now I have to live up to it, and let me see if I can. Thank you so much for inviting me part of this. Great. I thought instead of starting from the beginning, let's start from where you are today. You have a very broad overview of what is happening in the world of AI and how that's changing the world, and not only do you look at it and study it, but in a sense you're putting your money where your mouth is. Your firm has invested a huge amount of money in Thrive Capital, including in OpenAI and many others. Can you give us a little bit of a view of how you see things changing, and have you seen anything that has changed things as fast as AI has?
So Adal, as you mentioned in your introduction, I have become in some ways a student of business history. If you think about great technological moments that occurred in human history, everybody talks about the steam engine, electricity, the rise of semiconductors in the 1980s, the birth of the personal computer, the internet, and the mobile phone. Today, most of us are more lost without our mobile phone than almost any other thing in life. I think the AI wave is as profound, and perhaps even more profound, than any of these shifts. The challenge is that when they first begin, you don't have a full vision of how big this could be. Early predictions for mobile phones were that it would be a toy for rich people or people in the military, but now in India, everyone owns a phone. Already, the adoption of artificial intelligence is the fastest curve we have ever seen in the adoption of any technology in human history. ChatGPT reached 100 million monthly users faster than Google or TikTok. Today, adoption is very much at an individual consumer level, but I think it's going to be profound in terms of how we work. The first generation of machines replaced human labor, then information technology put organizational processes into software. Now AI will be a companion for how we think, imagine, and create. It will change every job. Five years from now, I can't imagine a person doing their job without using AI. Some jobs will become obsolete, some will be enhanced, but many new jobs might be created too. Today, we talk about social media influencers, network engineers, software engineers—jobs that didn't exist 20 years ago. The entire Indian software industry is a 30-year-old phenomenon. So we should all be ready for fairly dramatic impact of AI in our lives, and the earlier everyone begins, the better off they'll be.
Nitin, how do you think people and companies should prepare for this? You talked about individuals using it, but what do you see companies, organizations, and governments doing about it? Where are you seeing examples of people taking an aggressive and forward-thinking view on it?
The first step many companies take, which I think is progressive, is to create a sandbox of sorts with ChatGPT, Gemini, or Anthropic—any of the many LLMs available—to give employees a safe way to use it with company data. Otherwise, people using public versions risk having company data become part of these generalized models. Creating a safe architecture is a really important first step because it protects data privacy and confidential information. Then you see enormous experimentation. At Harvard Business School, some faculty are using AI for everything, while others are banning students from using it. The full range exists, from anxiety to full experimentation. In all organizations, we are often led by the entrepreneurs, the most intrepid people who get to the frontier more quickly, and their experimentation allows the rest of the organization to catch up. For example, the Piramal Group in India has started encouraging people to develop their own applications using OpenAI. Instead of internal IT teams getting thousands of requests and creating a stack ranking, they've taught people to code, and hundreds of applications have been built. A recent Diwali ad was completely produced using AI. They now have customer service agents that are completely AI, and if you don't like the answers, you can switch to a human, but they're discovering people enjoy talking to the AI more. In consulting firms, presentations and report writing are being done with an analyst working with an AI. We invested in a company making financial analysis routine: a company can now publish its annual statement in less than one day when it used to take a month. This is just the beginning.
One very interesting point you made is that this technology democratizes access to everyone. Each person can develop something new. You don't have to have five brilliant people at the center deciding how to apply it. It can be applied by anyone in the organization.
In fact, if anybody is listening to this podcast, I would say if you're not using ChatGPT or some version you like—I'm personally attached to ChatGPT because Thrive is an investor in OpenAI, but all LLMs are exceptionally good—you should be using it yourself, figuring out how it can give you superpowers at work, and using it in your personal life. I missed the entire social media generation—never on Facebook, TikTok, etc.—but today I use ChatGPT maybe three to four hours a day. It has literally become a companion. When I write, I use it to critique my writing. Sometimes I stare at a blank sheet of paper, and ChatGPT has been the most productive and fertile part of my intellectual life in the last year and a half. I don't use it to write anything in the end; I write myself, but it's the best editor you carry with you all the time.
I just want to highlight two things about India. First, the honorable Prime Minister used AI and ChatGPT a year ago and continues to use it, which is an extraordinary example of what makes this technology different. In the past, people might say it's not for them unless they're a techie or young, but this technology is so easy to use. Soon you can even use it with a voice interface. So there is no reason for anybody not to be using it. Second, many ministers are using it, and the PM encouraged bureaucrats to use it. You'll be happy to know that 1.4 million Indian bureaucrats have been trained in AI.
That is amazing. That gives me so much hope and excitement because I really believe the individuals, companies, organizations, and countries that will get ahead in this race are the ones who become power users of this technology. This is not about developing the technology; that is already being done by many. The technology will be available to anyone quite inexpensively. The better you become as users, the more advantage you'll derive. So it's really exciting to hear that so many people in the Indian government have started using it. That makes me feel optimistic that India will end up being a leader in the use of this technology.
We can pat ourselves on the back, but it lays out the challenge. We have to get another 10 million Indian civil servants trained this year, but at least 1.4 million have been trained, and I don't think any other country has had such a major effort. So you are reinforcing that this technology democratizes access, and it should be made available to everyone. I wanted to switch a little bit from the present to the past. You've done a lot of research on the growth of the US economy and major corporations. Can you talk about what you learned about leadership and then come back to what you see in India today?
I wrote a book called 'In Their Time,' which was a study of a thousand very prominent business leaders in American history over the 20th century. These were people recognized for doing something important in business in their decade. Early in the 20th century, you have Andrew Carnegie, who created US Steel, and JP Morgan, who financed the early construction of the American economy based on railroads and steel. An important lesson is the power of building infrastructure that connects the entire nation, which gave America its exceptional strength in the 20th century. Then in the 1920s, you see the rise of CW Post and Kellogg, who created breakfast cereals and consumer packaged goods like Coca-Cola. In the 1930s, Disney created the movie industry. In the 1940s, World War II saw defense companies. In the 1950s, Levitt built the suburbs, creating housing and the American landscape. In the 1960s, containerization of shipping transformed global trade. Then semiconductors, Bill Gates and the PC, and later Mark Zuckerberg and internet companies. The biggest lesson is that progress is not linear; it's a series of eras that create the foundation for the next. Opportunities always emerge because there are entrepreneurial opportunities. For example, in Battle Creek, Michigan, there were over 300 cereal companies at one point, but by the 1950s, only three remained. The same happened in the automotive industry. So at any stage, you need entrepreneurs building new things, exceptional managers scaling things, and restructurers who redeploy resources to better uses. This creative destruction is vital for a great economy.
That's very interesting. In the development of a country like India over the last 20 years, does it need more of one kind of leader? With every new technology, do you see a greater flurry of entrepreneurial leaders and managers? How does that cycle play out in India?
I think India is still a young nation. The Prime Minister has challenged us to be independent in every sense by 100 years of independence. I think our greatest demand is for more entrepreneurs, especially with AI making technology democratically usable. We need entrepreneurs who can flourish. But we also need people who can take small companies and scale them. One thing India has lagged on is the midsize company sector. We have many small enterprises and some of the best large companies like Tatas, Reliance, but not enough midsize companies. In America, midsize companies from $100 million to $1 billion in revenue account for the majority of employment. We need to help the 5-person company become 100-person, and the 100-person become 500-person. That will challenge larger companies and create aspiration for entrepreneurs.
What have you seen change in the last 20 years in terms of the emergence of Indian companies that can compete anywhere in the world?
I had the great privilege of growing up in a family where my father was a manager at Crompton Greaves. I came of age when India was just getting liberalized. I remember my father saying they had moved from a seller's economy to a buyer's economy. In a seller's economy, as long as you had a license, whatever you produced got sold. Now you had to compete for the customer, producing quality at ever-reducing prices. Over the last 30 years, Indian companies have learned to operate in a buyer market. The Indian consumer is especially demanding, making us competitive. We offer telecom services at the cheapest rates in the world. But now the challenge is to push innovation. LG started off making American TVs cheaply; now America can't make the TVs LG makes. India has established it can make any existing product cost competitively. But Chinese companies are patenting 35-40% of new patents, and Korean companies are third. India is not very high on that list. The next great challenge is to build on this foundation and invent the next products and services for the world. Our jugaad can be applied to making new things, not just making existing things effectively.
