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The Fast Company Impact Council is an invitation-only membership community of leaders, experts, executives, and entrepreneurs who share their insights with our audience. Members pay annual dues for access to peer learning, thought leadership opportunities, events and more. In just a few short years, generative artificial intelligence has begun demonstrating its tremendous business potential. Stanford Universitys latest AI Index report reveals that global corporate investment in AI grew nearly 45% in 2024 to reach $252.3 billion. With private investment in generative AI up 8.5 times over 2022 levels, forecasts suggest that AI could soon contribute trillions of dollars to the American economy alone. By 2028, agentic AI, the next stage in AIs evolution, could be making at least 15% of day-to-day decisions at work and bring greater efficiency, productivity, and innovation. Were already seeing how AI is creating new businesses, products and services with the potential to expand access to new quality jobs and build new sources of wealth. Today, workers are using AI to inject creativity into their current jobs and start and grow their own businesses. Two-thirds of small businesses that use AI say their own employees are introducing AI tools to the workplace to improve operations, reduce costs and spark innovation. Many organizations are understandably focused on the near-term time- and cost-savings this emerging technology brings about. But pure efficiency wont unlock the true value of AI; that will require tapping into the expertise and creativity of their employees. To fully realize AI’s potential to revolutionize our economy, we need to put workers at the center of the process of deciding where and how it shows up in the workplace. What does that look like in practice? AI training First, organizations should offer more AI trainingfrom basic literacy to implementation. AI usage at work is surging, according to a new study from my team at JFF. Two years ago, only 8% of individuals used AI at work. Today, its 35%. Those who use AI say AI is making them more efficientand their jobs more interestingby reducing the number of tedious tasks and allowing them to focus on more strategic and creative work. More training means more people experiencing these benefits and contributing to decision making around AI. Yet our survey also found wide training gaps. Fewer than one third (31%) of workers say their employers provide training on AI fundamentals or specific AI tools and systems. Slightly more than one third (34%) of employees not receiving AI training at work say they want their employer to offer it. This lack of access to training is creating barriers to the effective implementation of AI at work. Previous JFF research shows that nearly 60% of small businesses cited workforce readiness as the most common barrier to incorporating AI technology into their businesses. To overcome that barrier, organizations can start by providing affordable and practical AI literacy training that help employees learn how to get the most out of AI and become responsible users of this emerging technology. Employee-driven innovation Second, organizations should catalyze employee-driven innovation. Workers are already eager to use AI: according to JFFs recent survey, 20% of employees say theyre taking the initiative to use AI at work in the absence of formal direction from their employers, while nearly 30% of workers are leveraging AI tools for strategic growth and innovation. Theres a good business case to be made for bottom-up transformation. Research suggests that when workers are asked for their input, organizations are more likely to make effective use of AI tools and improve the quality of workers jobs. To unlock growth using AI, businesses should involve their employees in piloting and deploying AI tools and processes across multiple roles and functions throughout an organization. Frontline employeesexperts on their own workflowsare often in the best position to help improve and refine development of AI tools and processes. Theyre the ones companies should call on to find uses of AI that can create value and drive innovation. AI and human collaboration Finally, organizations should reconsider how their employees spend their time, the nature of the work they do, and their unique skills so they can unlock the best parts of collaboration between AI and humans. The immediate goal of AI implementation should be about enabling workers to prioritize work that creates new products, services and value that helps businesses grow. Collaboration between humans and AI has enormous potential. As a Harvard Business School working paper suggests, AI can help professionals significantly boost performance, expertise, and social connectivity in team settings. As AI becomes more capable of making its own decisions and completing complex tasks, humans will spend more time supervising AI, discerning and evaluating AI outputs, and managing interpersonal and collaborative activities with other humans. Weve also seen that AI appears to significantly increase the value of human leadership in interpersonal and highly cognitive tasks like staffing organizations, building relationships, and guiding and motivating teams. Employers have an opportunity to prepare for this shift by designing high-quality jobsand involving their workers in this processthat can get the best out of collaboration between humans and AI. The transformation of work is underway. Businesses seeking to navigate it should support employees in their earnest desire to develop AI literacy and skills, catalyze creativity and innovation throughout the organization, and intentionally redesign jobs to unlock the strengths of both AI and humans. Previous technological revolutions have shown that the benefits of progress are not distributed equally. But if companies keep their employees at the center, they can fulfill AIs potential as a force to expand access to quality jobs and economic opportunity for all. Maria Flyn is president and CEO of Jobs for the Future.
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E-Commerce
The Fast Company Impact Council is an invitation-only membership community of leaders, experts, executives, and entrepreneurs who share their insights with our audience. Members pay annual dues for access to peer learning, thought leadership opportunities, events and more. Every accumulation becomes the means of new accumulation. This is what Karl Marx has to say about capital. He does not get enough credit for being one of the more accurate predictors of capitalism because people understandably do not like his solution. But the truth is, most philosophers do not even present a solution and he understood the problem as well as anyone. We saw more bankruptcies in 2024 than in the last 14 years, and consumer discretionary was the leading bankruptcy sector. This problem will only increase as AI proliferates. And while the linked article cites other reasons, we think the larger reason is Amazon. Amazon has achieved a level of automation and scale through what can only be described as accelerating accumulation. This is the major reason brick and mortar retail has become so tough, and Amazons control of the supply chain makes it harder for online businesses to compete. But why do we think this is just the beginning? We are seeing a clear increase in funding and headcount towards AI. Eighty-seven percent of Y Combinators latest batch of companies focus on AIa huge sign we are only scratching the surface of a move towards automation that can threaten small businesses. Soon it will not just be smaller businesses in the consumer cyclical sector threatened by this concerted push towards automation. But it is not just the startup world seeing this trend. Even our most successful companies are slowing down their hiring; at the same time the top 50 AI startups are accelerating at close to a 200% rate. Big tech hiring slows Live Data Technologies on Big Tech Headcount Growth Source: Live Data Technologies Source: Live Data Technologies Live Data Technologies recent analysis offers insight on the growth and profitability trends of these companies. Contrasting Magnificent Seven companies that lean on AI versus more pure AI plays in the AI 50, you can see the scary trend towards more complete automation. Larger commitments to automation could further acceleration reduction in headcount, especially for engineering positions. Google recently announced that over 25% of its code was written by AI. If some of the most talented engineers in the world at Google can no longer compete with their AI, how much longer do small and medium sized businesses have before, at the very least, their funding environment becomes more difficult as a result, and bankruptcy ensues? Traditionally, small caps have lower profitability but higher growth potential, while large caps are the opposite. But heres what our data found: Companies with a profitability score above 90, typically large or mega caps, are now growing at nearly the same rate as small caps. Its not just a statistical fluke. This pattern has only emerged during past industrial revolutions, when large companies leveraged new technologies, from railroads to oil, to dominate markets. Today, AI is the catalyst, and its the big players like Nvidia that are reaping the benefits. These profitability and growth forecasts are built on analyst predictions and economic simulations, and scaled on a bell curve with about 2,000 other stocks/ETFs. What is even more alarming about these numbers is those of the largest companies. Stocks in the 90th percentile or above in Prospero.ais profitability rating are growing more than 80%. This is strong evidence that even the most profitable companies are not being slowed down by their size. Generally it is easier to grow at faster rates if your company is less mature from a profitability standpoint. The fact that the smallest companies < 10 are also projected to grow at slower rates than <20 is perhaps even more shocking. Companies with the smallest revenue should have the easiest time growing at a faster rate. Moving from $1 million in revenue to $2 million from one year to the next is easier than going from, say, $25 million to $50 million. Profit fuels growth If you are looking for the flagship demonstration of tis idea, look no further than Nvidia. It generates billions of dollars in profit each quarter, while still achieving massive growth. Revenue from fiscal 2025 was up 114%. Looking for a benchmark number led us to Amazon, one of the greatest growth stories of our time. Amazon posted 60.52% growth when comparing Q4 2024 and Q4 2023 quarterly operating income, and posted its best quarter in the last 15 years. And it did that at roughly half of Nvidias revenue. That is what makes the Nvidia story so interesting. In 2023, Nvidia had a 98% market share in data center GPUs. Other domestic and international companies have been trying to compete with them in this market, and they simply cannot. Nvidias financial strength allows it to attract the best talent and develop cutting-edge AI technologies, creating a cycle where profit fuels growth, which then drives more profit. Now what does this mean for small caps? I think the implications are pretty clear. Were seeing the monopolization ramp up, just as we did in past revolutions. Large companies, flush with cash, have the means to capitalize on advantages of scale in ways that small players simply cant match. This makes it harder and harder for small cap companies to compete on the type of growth metrics it takes to attract the needed capital to compete in ever more competitive spaces. The rich get richer, and the competitive gap widens. So, whats the bottom line? AI-driven bankruptcy isnt just a matter of companies failing; its a symptom of an economic shift where capital accumulation accelerates faster than ever before. This isnt just a chapter in bankruptcy law, its a chapter in how AI will redefine capitalism itself. George Kailas is CEO of Prospero.Ai.
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E-Commerce
Just beyond a fenced-off access road in fields of tall grass on public land in Pennsylvanias northwest sits a natural gas well pad that sat idle for close to a decade. The old fracking site suddenly roared back to life in 2022, spewing noise and pollution and rattling residents who were used to hunting pheasant on the quiet, bucolic terrain. Diversified Energy turned on the well pad, known as Longhorn Pad A, to funnel the natural gas into on-site generators powering cryptocurrency-mining supercomputers that churn away at numbers at all hours. The company set up and started the mine without securing a required air quality permit from state regulators, Capital & Main reported last year. Now, after a little more than two years, the company has packed up and left, abandoning the wells and associated crypto infrastructure in violation of state law, according to state regulators. Diversified Energy, which disputes the states finding that it abandoned the wells, has billed itself as innovative, giving new life to aging, low-producing gas wells that would otherwise be uneconomical to operate. Cryptocurrency aids that goal: It allows the company to monetize wells that lack pipeline infrastructure that is typically crucial to selling gas. The company has, in just a few years, amassed a portfolio of wells bigger than that of any of its peers in the U.S., many of those wells low-producing, despite evidence that Diversified may not have adequate resources to plug them all at the end of their lives. This has stoked concerns among environmentalists about who will be on the hook for cleanup should the company abandon them. When a wellhead crypto mine suddenly shuts down it raises a host of new concerns, chief among them: What happens when operators decide its time to move on without plugging the wells? Worries about the long-term environmental costs have mounted in Appalachian and other oil and gas-producing communities across the country. Diversified appears eager to try to squeeze a few more years profits out of old wells by burning the remaining gas to power energy-hungry computers. But they have shown less zeal when it comes to safely closing them, often shirking their obligations to plug them to prevent the ongoing release of greenhouse gas pollution. Companies abandon wells when they walk away from them without plugging them after they’re no longer lucrative, increasing the likelihood that they’ll be left to leak planet-warming methane gas into the atmosphere for years to come. Abandoning wells violates the Pennsylvania Oil and Gas Act and saddles states with the cost and responsibility of plugging them. Pennsylvania, the birthplace of the U.S. oil industry, has an estimated 350,000 orphaned and abandoned oil and gas wells, more than any other state and responsible for close to 8% of the states methane emissions. The wells, which sit atop a pad called Longhorn A on state game lands in rural Horton township, were drilled under the ownership of another natural gas company, EQT, in 2011, but sat inactive for all those years, considered abandoned by regulators. Diversified Energy brought them back to life in December 2022. The company applied for a permit for generators to power cryptocurrency mining equipment atop the pad but didnt wait to receive them from state regulators before firing up the loud and polluting equipment. Capital & Main reported last year that the firm was unresponsive to questions from state agencies about its plans with the well pad, even as residents raised concerns about noise and its threat to neighbors and wildlife. The company received its permit to add crypto-mining equipment to the well pad in December 2023. A Pennsylvania Department of Environmental Protection inspector visited the well pad earlier this year to find the cryptocurrency mining equipment gone. Inspection reports from a March 4 visit show metallic sheds sitting empty on the gravel well pad. The department issued Diversified a notice of violation for abandoning the well on March 10, requesting a response from the company within two weeks. Daniel O. Frick, a director in the Environmental Health, Safety Regulatory Department at Diversified Energy, told regulators in a March 18 email that technically the site isnt abandoned, and that the company plans to resume pulling gas from the well. Regulators have also accused the Birmingham, Alabama-based company of violating a consent order and agreement when it abandoned Longhorn A. In the 2021 agreement that company representatives signed when it acquired the wells from fracking company EQT, Diversified agreed to plug them and 13 others at the end of their lives. Diversified Energy did not respond to Capital & Mains requests for comment. State officials arent the only ones concerned. Environmental advocates have warned for years about the environmental risks of Diversified Energys large portfolio of low-producing wells across Pennsylvania, West Virginia, Kentucky, and Ohio. They now fear abandonment of wells snatched up by the company across Appalachia for short-term windfalls will leave the public with the long-term costs of closure and cleanup. Diversified must not be allowed to walk away and leave others to clean up its mess, said Charles McPhedran, senior attorney at Earthjustice, an environmental law nonprofit. McPhedran has previously urged regulators not to issue Diversified a permit for crypto mining at the site, citing noise concerns and the companys unaddressed environmental violations. Dave Gustafson, deputy executive director of the Pennsylvania Game Commission, which regulates and eases out the state game lands on which Longhorn A sits, said the agency wouldnt consider these wells abandoned and that the company had not expressed their plans to move forward with production nor have they indicated they intend to plug the well. The Pennsylvania Department of Environmental Protection disagrees. The wells are not equipped for production, Tom Decker, a department spokesperson, told Capital & Main in an email. Diversifieds claim that the wells are still equipped is contrary to the Departments observations during the recent inspection and has not been further verified by Diversified. The department has given the company until September to plug the wells. Plugging a well can cost more than $100,000, so its common for operators to try to avoid those obligations, said Ted Boettner, senior researcher at the nonprofit think tank Ohio River Valley Institute. They lift the well and get it to produce some puffs of gas and say, Were back in our active status, and they wont check for another 10 years, Boettner said. A 2022 report by the Ohio River Valley Institute argued Diversified Energy was operating with a business model built to fail Appalachia because it relied on obtaining aging wells from other operators and squeezing the value out of them before the end of their useful lives, all without having enough funds to plug its entire inventory of assets. In doing so, Diversified has acquired the largest portfolio of low-producing wells in Appalachia, which the Institute researchers wrote could become a wave of soon-to-be-orphaned wells that could be offloaded onto the public. In recent months there have been new doubts raised about the companys commitment to well-plugging. In December, Diversified reached a settlement in a class-action lawsuit brought by West Virginia landowners who argued the company had abandoned wells on their properties; it agreed to plug nearly 3,000 wells across Appalachia by 2034. Within the first two weeks of January, the Department of Environmental Protection slapped Diversified with 11 notices of violation for abandoning shale gas wells in Pennsylvania. Boettner said the state should do more to penalize the practice of abandoning wells. Without strong enforcement, he said, Were going to end up left with all of these wells to plug. Theres nothing stopping them. Meanwhile, even as it is walking away from well pads, Diversified is expanding its offerings. Just days after inspectors visited Longhorn A, Diversified announced a large-scale partnership with fuel cell company FuelCell Energy and energy infrastructure company TESIAC to power a growing industry of off-grid data centers using natural gas from fracking wells and coal mines. Its one of many natural gas companies throwing its weight behind the coming AI boom, threatening to prolong the life of polluting industries. But the Longhorn A well abandonments raise questions about the companys ability to care for such projects at the end of their lives, as a broader data boom raises concerns among environmentalists about air pollution. The company has also applied for state grants for well-plugging elsewhere in Pennsylvania, according to records Capital & Main obtained under Pennsylvanias Right-to-Know Law. Diversified CEO Rusty Hutson Jr. bought his first set of oil and gas wells in 2001 as a personal investment, taking out a home equity loan to afford a package of 35 wells that his father, a third-generation oil and gas worker, found in a deal, he said in a 2023 interview with Mountaineer Media. Wed go out in cold, heat, fix leaks, work on wells together, Hutson said. And I did that for two or three years before we started really growing the company. As it has added new wells to its portfolio, Diversified has written into its balance sheets lower-than-industry-standard asset retirement obligationsor estimates for the cost of plugging and closing off wells at the end of their lives. The strategy has alarmed environmentalists, who fear the company is, at best, giving a lifeline to wells in need of decommissioning and, at worst, creating a massive taxpayer liability should it go under. But Hutson is proud of his firms unique strategy. While most oil and gas companies focus on drilling new assets, Diversified keeps its eyes on their leftovers. Our game is acquiring existing mature production, operating it more efficiently than everyone else would, driving costs down, enhancing production on wells that hadnt been given much time, or attention, or capital, driving margins and then paying dividends to our shareholders, he told Mountaineer Media. The company was listed only on the London Stock Exchange until December 2023, when it went public in the U.S. on the New York Stock Exchange. That same day, House Democrats opened a probe into the firms practices and emissions. Diversified Energy is responsible for remediating a substantial share of the countrys aging oil and gas wells, but we are concerned that your company may be vastly underestimating well cleanup costs, members of the House Committee on Energy and Commerce wrote in a letter to Hutson. The company responded at the time, saying its business model is based on stewardship that includes delivering well retirement and reclamation efforts. Boettner estimates that all but a small fraction of the vast trove of old wells Diversified has acquired in recent years are totally uneconomical, and one of his reports found that more than half could, by some definitions, be classified as inactive. In 2022, the company offloaded a set of 2,500 of them in Ohio. In January 2024, the company sold another part of its stake in Appalachia. Theyre able to squeeze out this money in these assets because of economies of scale, Boettner said. The only thing they can do is keep buying wells, and as long as they dont have to be accountable for those liabilities, it works. On the ground in Horton township, home to Longhorn A, local supervisor PJ Piccirillo said hes heard nothing from Diversified staff about their plans to abandon the wells and remove the associated crypto mine. He believes the company stopped running the well pad after the township issued an ordinance setting noise and light pollution limits on Bitcoin mines in 2023, shortly before the state issued Longhorn A its permit. The generators had been pulled and those big tanks had been pulled out, he said. Without any communication from the company, Piccirillo is concerned about future industrial development. He runs into abandoned wells in his corner of Elk County often that, he said, I dont know if anybody knows about. The township lacks jurisdiction over well abandonment, so theres nothing he can do about them from his position as a supervisor. All we know is that that property seems to have been abandoned, he said of Longhorn A. What might be next? This piece was originally published by Capital & Main, which reports from California on economic, political, and social issues.
Category:
E-Commerce
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