Consolidating systems for AI with iPaaS

For decades, enterprises reacted to shifting business pressures with stopgap technology solutions. To rein in rising infrastructure costs, they adopted cloud services that could scale on demand. When customers shifted their lives onto smartphones, companies rolled out mobile apps to keep pace. And when businesses began needing real-time visibility into factories and stockrooms, they layered on IoT systems to supply those insights.

Each new plug-in or platform promised better, more efficient operations. And individually, many delivered. But as more and more solutions stacked up, IT teams had to string together a tangled web to connect them—less an IT ecosystem and more of a make-do collection of ad-hoc workarounds.

That reality has led to bottlenecks and maintenance burdens, and the impact is showing up in performance. Today, fewer than half of CIOs (48%) say their current digital initiatives are meeting or exceeding business outcome targets. Another 2025 survey found that operations leaders point to integration complexity and data quality issues as top culprits for why investments haven’t delivered as expected.

Achim Kraiss, chief product officer of SAP Integration Suite, elaborates on the wide-ranging problems inherent in patchwork IT: “A fragmented landscape makes it difficult to see and control end-to-end business processes,” he explains. “Monitoring, troubleshooting, and governance all suffer. Costs go up because of all the complex mappings and multi-application connectivity you have to maintain.”

These challenges take on new significance as enterprises look to adopt AI. As AI becomes embedded in everyday workflows, systems are suddenly expected to move far larger volumes of data, at higher speeds, and with tighter coordination than yesterday’s architectures were built
to sustain.

As companies now prepare for an AI-powered future, whether that is generative AI, machine learning, or agentic AI, many are realizing that the way data moves through their business matters just as much as the insights it generates. As a result, organizations are moving away from scattered integration tools and toward consolidated, end-to-end platforms that restore order and streamline how systems interact.

Download the report.

This content was produced by Insights, the custom content arm of MIT Technology Review. It was not written by MIT Technology Review’s editorial staff. It was researched, designed, and written by human writers, editors, analysts, and illustrators. This includes the writing of surveys and collection of data for surveys. AI tools that may have been used were limited to secondary production processes that passed thorough human review.

From guardrails to governance: A CEO’s guide for securing agentic systems

The previous article in this series, “Rules fail at the prompt, succeed at the boundary,” focused on the first AI-orchestrated espionage campaign and the failure of prompt-level control. This article is the prescription. The question every CEO is now getting from their board is some version of: What do we do about agent risk?

Across recent AI security guidance from standards bodies, regulators, and major providers, a simple idea keeps repeating: treat agents like powerful, semi-autonomous users, and enforce rules at the boundaries where they touch identity, tools, data, and outputs.

The following is an actionable eight-step plan one can ask teams to implement and report against:  

Eight controls, three pillars: govern agentic systems at the boundary. Source: Protegrity

Constrain capabilities

These steps help define identity and limit capabilities.

1. Identity and scope: Make agents real users with narrow jobs

Today, agents run under vague, over-privileged service identities. The fix is straightforward: treat each agent as a non-human principal with the same discipline applied to employees.

Every agent should run as the requesting user in the correct tenant, with permissions constrained to that user’s role and geography. Prohibit cross-tenant on-behalf-of shortcuts. Anything high-impact should require explicit human approval with a recorded rationale. That is how Google’s Secure AI Framework (SAIF) and NIST AI’s access-control guidance are meant to be applied in practice.

The CEO question: Can we show, today, a list of our agents and exactly what each is allowed to do?

2. Tooling control: Pin, approve, and bound what agents can use

The Anthropic espionage framework worked because the attackers could wire Claude into a flexible suite of tools (e.g., scanners, exploit frameworks, data parsers) through Model Context Protocol, and those tools weren’t pinned or policy-gated.

The defense is to treat toolchains like a supply chain:

  • Pin versions of remote tool servers.
  • Require approvals for adding new tools, scopes, or data sources.
  • Forbid automatic tool-chaining unless a policy explicitly allows it.

This is exactly what OWASP flags under excessive agency and what it recommends protecting against. Under the EU AI Act, designing for such cyber-resilience and misuse resistance is part of the Article 15 obligation to ensure robustness and cybersecurity.

The CEO question: Who signs off when an agent gains a new tool or a broader scope? How does one know?

3. Permissions by design: Bind tools to tasks, not to models

A common anti-pattern is to give the model a long-lived credential and hope prompts keep it polite. SAIF and NIST argue the opposite: credentials and scopes should be bound to tools and tasks, rotated regularly, and auditable. Agents then request narrowly scoped capabilities through those tools.

In practice, that looks like: “finance-ops-agent may read, but not write, certain ledgers without CFO approval.”

The CEO question: Can we revoke a specific capability from an agent without re-architecting the whole system?

Control data and behavior

These steps gate inputs, outputs, and constrain behavior.

4. Inputs, memory, and RAG: Treat external content as hostile until proven otherwise

Most agent incidents start with sneaky data: a poisoned web page, PDF, email, or repository that smuggles adversarial instructions into the system. OWASP’s prompt-injection cheat sheet and OpenAI’s own guidance both insist on strict separation of system instructions from user content and on treating unvetted retrieval sources as untrusted.

Operationally, gate before anything enters retrieval or long-term memory: new sources are reviewed, tagged, and onboarded; persistent memory is disabled when untrusted context is present; provenance is attached to each chunk.

The CEO question: Can we enumerate every external content source our agents learn from, and who approved them?

5. Output handling and rendering: Nothing executes “just because the model said so”

In the Anthropic case, AI-generated exploit code and credential dumps flowed straight into action. Any output that can cause a side effect needs a validator between the agent and the real world. OWASP’s insecure output handling category is explicit on this point, as are browser security best practices around origin boundaries.

The CEO question: Where, in our architecture, are agent outputs assessed before they run or ship to customers?

6. Data privacy at runtime: Protect the data first, then the model

Protect the data such that there is nothing dangerous to reveal by default. NIST and SAIF both lean toward “secure-by-default” designs where sensitive values are tokenized or masked and only re-hydrated for authorized users and use cases.

In agentic systems, that means policy-controlled detokenization at the output boundary and logging every reveal. If an agent is fully compromised, the blast radius is bounded by what the policy lets it see.

This is where the AI stack intersects not just with the EU AI Act but with GDPR and sector-specific regimes. The EU AI Act expects providers and deployers to manage AI-specific risk; runtime tokenization and policy-gated reveal are strong evidence that one is actively controlling those risks in production.

The CEO question: When our agents touch regulated data, is that protection enforced by architecture or by promises?

Prove governance and resilience

For the final steps, it’s important to show controls work and keep working.

7. Continuous evaluation: Don’t ship a one-time test, ship a test harness

Anthropic’s research about sleeper agents should eliminate all fantasies about single test dreams and show how critical continuous evaluation is. This means instrumenting agents with deep observability, regularly red teaming with adversarial test suites, and backing everything with robust logging and evidence, so failures become both regression tests and enforceable policy updates.

The CEO question: Who works to break our agents every week, and how do their findings change policy?

 8. Governance, inventory, and audit: Keep score in one place

AI security frameworks emphasize inventory and evidence: enterprises must know which models, prompts, tools, datasets, and vector stores they have, who owns them, and what decisions were taken about risk.

For agents, that means a living catalog and unified logs:

  • Which agents exist, on which platforms
  • What scopes, tools, and data each is allowed
  • Every approval, detokenization, and high-impact action, with who approved it and when

The CEO question: If asked how an agent made a specific decision, could we reconstruct the chain?

And don’t forget the system-level threat model: assume the threat actor GTG-1002 is already in your enterprise. To complete enterprise preparedness, zoom out and consider the MITRE ATLAS product, which exists precisely because adversaries attack systems, not models. Anthropic provides a case study of a state-based threat actor (GTG-1002) doing exactly that with an agentic framework.

Taken together, these controls do not make agents magically safe. They do something more familiar and more reliable: they put AI, its access, and actions back inside the same security frame used for any powerful user or system.

For boards and CEOs, the question is no longer “Do we have good AI guardrails?” It’s: Can we answer the CEO questions above with evidence, not assurances?

This content was produced by Protegrity. It was not written by MIT Technology Review’s editorial staff.

The crucial first step for designing a successful enterprise AI system

Many organizations rushed into generative AI, only to see pilots fail to deliver value. Now, companies want measurable outcomes—but how do you design for success?

At Mistral AI, we partner with global industry leaders to co-design tailored AI solutions that solve their most difficult problems. Whether it’s increasing CX productivity with Cisco, building a more intelligent car with Stellantis, or accelerating product innovation with ASML, we start with open frontier models and customize AI systems to deliver impact for each company’s unique challenges and goals.

Our methodology starts by identifying an iconic use case, the foundation for AI transformation that sets the blueprint for future AI solutions. Choosing the right use case can mean the difference between true transformation and endless tinkering and testing.

Identifying an iconic use case

Mistral AI has four criteria that we look for in a use case: strategic, urgent, impactful, and feasible.

First, the use case must be strategically valuable, addressing a core business process or a transformative new capability. It needs to be more than an optimization; it needs to be a gamechanger. The use case needs to be strategic enough to excite an organization’s C-suite and board of directors.

For example, use cases like an internal-facing HR chatbot are nice to have, but they are easy to solve and are not enabling any new innovation or opportunities. On the other end of the spectrum, imagine an externally facing banking assistant that can not only answer questions, but also help take actions like blocking a card, placing trades, and suggesting upsell/cross-sell opportunities. This is how a customer-support chatbot is turned into a strategic revenue-generating asset.

Second, the best use case to move forward with should be highly urgent and solve a business-critical problem that people care about right now. This project will take time out of people’s days—it needs to be important enough to justify that time investment. And it needs to help business users solve immediate pain points.

Third, the use case should be pragmatic and impactful. From day one, our shared goal with our customers is to deploy into a real-world production environment to enable testing the solution with real users and gather feedback. Many AI prototypes end up in the graveyard of fancy demos that are not good enough to put in front of customers, and without any scaffolding to evaluate and improve. We work with customers to ensure prototypes are stable enough to release, and that they have the necessary support and governance frameworks.

Finally, the best use case is feasible. There may be several urgent projects, but choosing one that can deliver a quick return on investment helps to maintain the momentum needed to continue and scale.

This means looking for a project that can be in production within three months—and a prototype can be live within a few weeks. It’s important to get a prototype in front of end users as fast as possible to get feedback to make sure the project is on track, and pivot as needed.

Where use cases fall short

Enterprises are complex, and the path forward is not usually obvious. To weed through all the possibilities and uncover the right first use case, Mistral AI will run workshops with our customers, hand-in-hand with subject-matter experts and end users.

Representatives from different functions will demo their processes and discuss business cases that could be candidates for a first use case—and together we agree on a winner. Here are some examples of types of projects that don’t qualify.

Moonshots: Ambitious bets that excite leadership but lack a path to quick ROI. While these projects can be strategic and urgent, they rarely meet the feasibility and impact requirements.

Future investments: Long-term plays that can wait. While these projects can be strategic and feasible, they rarely meet the urgency and impact requirements.

Tactical fixes: Firefighting projects that solve immediate pain but don’t move the needle. While these cases can be urgent and feasible, they rarely meet the strategy and impact requirements.

Quick wins: Useful for building momentum, but not transformative. While they can be impactful and feasible, they rarely meet the strategy and urgency requirements.

Blue sky ideas: These projects are gamechangers, but they need maturity to be viable. While they can be strategic and impactful, they rarely meet the urgency and feasibility requirements.

Hero projects: These are high-pressure initiatives that lack executive sponsorship or realistic timelines. While they can be urgent and impactful, they rarely meet the strategy and feasibility requirements.

Moving from use case to deployment

Once a clearly defined and strategic use case ready for development is identified, it’s time to move into the validation phase. This means doing an initial data exploration and data mapping, identifying a pilot infrastructure, and choosing a target deployment environment.

This step also involves agreeing on a draft pilot scope, identifying who will participate in the proof of concept, and setting up a governance process.

Once this is complete, it’s time to move into the building phase. Companies that partner with Mistral work with our in-house applied AI scientists who build our frontier models. We work together to design, build, and deploy the first solution.

During this phase, we focus on co-creation, so we can transfer knowledge and skills to the organizations we’re partnering with. That way, they can be self-sufficient far into the future. The output of this phase is a deployed AI solution with empowered teams capable of independent operation and innovation.

The first step is everything

After the first win, it’s imperative to use the momentum and learnings from the iconic use case to identify more high-value AI solutions to roll out. Success is when we have a scalable AI transformation blueprint with multiple high-value solutions across the organization.

But none of this could happen without successfully identifying that first iconic use case. This first step is not just about selecting a project—it’s about setting the foundation for your entire AI transformation.

It’s the difference between scattered experiments and a strategic, scalable journey toward impact. At Mistral AI, we’ve seen how this approach unlocks measurable value, aligns stakeholders, and builds momentum for what comes next.

The path to AI success starts with a single, well-chosen use case: one that is bold enough to inspire, urgent enough to demand action, and pragmatic enough to deliver.

This content was produced by Mistral AI. It was not written by MIT Technology Review’s editorial staff.

Rules fail at the prompt, succeed at the boundary

From the Gemini Calendar prompt-injection attack of 2026 to the September 2025 state-sponsored hack using Anthropic’s Claude code as an automated intrusion engine, the coercion of human-in-the-loop agentic actions and fully autonomous agentic workflows are the new attack vector for hackers. In the Anthropic case, roughly 30 organizations across tech, finance, manufacturing, and government were affected. Anthropic’s threat team assessed that the attackers used AI to carry out 80% to 90% of the operation: reconnaissance, exploit development, credential harvesting, lateral movement, and data exfiltration, with humans stepping in only at a handful of key decision points.

This was not a lab demo; it was a live espionage campaign. The attackers hijacked an agentic setup (Claude code plus tools exposed via Model Context Protocol (MCP)) and jailbroke it by decomposing the attack into small, seemingly benign tasks and telling the model it was doing legitimate penetration testing. The same loop that powers developer copilots and internal agents was repurposed as an autonomous cyber-operator. Claude was not hacked. It was persuaded and used tools for the attack.

Prompt injection is persuasion, not a bug

Security communities have been warning about this for several years. Multiple OWASP Top 10 reports put prompt injection, or more recently Agent Goal Hijack, at the top of the risk list and pair it with identity and privilege abuse and human-agent trust exploitation: too much power in the agent, no separation between instructions and data, and no mediation of what comes out.

Guidance from the NCSC and CISA describes generative AI as a persistent social-engineering and manipulation vector that must be managed across design, development, deployment, and operations, not patched away with better phrasing. The EU AI Act turns that lifecycle view into law for high-risk AI systems, requiring a continuous risk management system, robust data governance, logging, and cybersecurity controls.

In practice, prompt injection is best understood as a persuasion channel. Attackers don’t break the model—they convince it. In the Anthropic example, the operators framed each step as part of a defensive security exercise, kept the model blind to the overall campaign, and nudged it, loop by loop, into doing offensive work at machine speed.

That’s not something a keyword filter or a polite “please follow these safety instructions” paragraph can reliably stop. Research on deceptive behavior in models makes this worse. Anthropic’s research on sleeper agents shows that once a model has learned a backdoor, then strategic pattern recognition, standard fine-tuning, and adversarial training can actually help the model hide the deception rather than remove it. If one tries to defend a system like that purely with linguistic rules, they are playing on its home field.

Why this is a governance problem, not a vibe coding problem

Regulators aren’t asking for perfect prompts; they’re asking that enterprises demonstrate control.

NIST’s AI RMF emphasizes asset inventory, role definition, access control, change management, and continuous monitoring across the AI lifecycle. The UK AI Cyber Security Code of Practice similarly pushes for secure-by-design principles by treating AI like any other critical system, with explicit duties for boards and system operators from conception through decommissioning.

In other words: the rules actually needed are not “never say X” or “always respond like Y,” they are:

  • Who is this agent acting as?
  • What tools and data can it touch?
  • Which actions require human approval?
  • How are high-impact outputs moderated, logged, and audited?

Frameworks like Google’s Secure AI Framework (SAIF) make this concrete. SAIF’s agent permissions control is blunt: agents should operate with least privilege, dynamically scoped permissions, and explicit user control for sensitive actions. OWASP’s Top 10 emerging guidance on agentic applications mirrors that stance: constrain capabilities at the boundary, not in the prose.

From soft words to hard boundaries

The Anthropic espionage case makes the boundary failure concrete:

  • Identity and scope: Claude was coaxed into acting as a defensive security consultant for the attacker’s fictional firm, with no hard binding to a real enterprise identity, tenant, or scoped permissions. Once that fiction was accepted, everything else followed.
  • Tool and data access: MCP gave the agent flexible access to scanners, exploit frameworks, and target systems. There was no independent policy layer saying, “This tenant may never run password crackers against external IP ranges,” or “This environment may only scan assets labeled ‘internal.’”
  • Output execution: Generated exploit code, parsed credentials, and attack plans were treated as actionable artifacts with little mediation. Once a human decided to trust the summary, the barrier between model output and real-world side effect effectively disappeared.

We’ve seen the other side of this coin in civilian contexts. When Air Canada’s website chatbot misrepresented its bereavement policy and the airline tried to argue that the bot was a separate legal entity, the tribunal rejected the claim outright: the company remained liable for what the bot said. In espionage, the stakes are higher but the logic is the same: if an AI agent misuses tools or data, regulators and courts will look through the agent and to the enterprise.

Rules that work, rules that don’t

So yes, rule-based systems fail if by rules one means ad-hoc allow/deny lists, regex fences, and baroque prompt hierarchies trying to police semantics. Those crumble under indirect prompt injection, retrieval-time poisoning, and model deception. But rule-based governance is non-optional when we move from language to action.

The security community is converging on a synthesis:

  • Put rules at the capability boundary: Use policy engines, identity systems, and tool permissions to determine what the agent can actually do, with which data, and under which approvals.
  • Pair rules with continuous evaluation: Use observability tooling, red-teaming packages, and robust logging and evidence.
  • Treat agents as first-class subjects in your threat model: For example, MITRE ATLAS now catalogs techniques and case studies specifically targeting AI systems.

The lesson from the first AI-orchestrated espionage campaign is not that AI is uncontrollable. It’s that control belongs in the same place it always has in security: at the architecture boundary, enforced by systems, not by vibes.

This content was produced by Protegrity. It was not written by MIT Technology Review’s editorial staff.

The power of sound in a virtual world

In an era where business, education, and even casual conversations occur via screens, sound has become a differentiating factor. We obsess over lighting, camera angles, and virtual backgrounds, but how we sound can be just as critical to credibility, trust, and connection.

That’s the insight driving Erik Vaveris, vice president of product management and chief marketing officer at Shure, and Brian Scholl, director of the Perception & Cognition Laboratory at Yale University. Both see audio as more than a technical layer: It’s a human factor shaping how people perceive intelligence, trustworthiness, and authority in virtual settings.

“If you’re willing to take a little bit of time with your audio set up, you can really get across the full power of your message and the full power of who you are to your peers, to your employees, your boss, your suppliers, and of course, your customers,” says Vaveris.

Scholl’s research shows that poor audio quality can make a speaker seem less persuasive, less hireable, and even less credible.

“We know that [poor] sound doesn’t reflect the people themselves, but we really just can’t stop ourselves from having those impressions,” says Scholl. “We all understand intuitively that if we’re having difficulty being understood while we’re talking, then that’s bad. But we sort of think that as long as you can make out the words I’m saying, then that’s probably all fine. And this research showed in a somewhat surprising way, to a surprising degree, that this is not so.”

For organizations navigating hybrid work, training, and marketing, the stakes have become high.

Vaveris points out that the pandemic was a watershed moment for audio technology. As classrooms, boardrooms, and conferences shifted online almost overnight, demand accelerated for advanced noise suppression, echo cancellation, and AI-driven processing tools that make meetings more seamless. Today, machine learning algorithms can strip away keyboard clicks or reverberation and isolate a speaker’s voice in noisy environments. That clarity underpins the accuracy of AI meeting assistants that can step in to transcribe, summarize, and analyze discussions.

The implications across industries are rippling. Clearer audio levels the playing field for remote participants, enabling inclusive collaboration. It empowers executives and creators alike to produce broadcast-quality content from the comfort of their home office. And it offers companies new ways to build credibility with customers and employees without the costly overhead of traditional production.

Looking forward, the convergence of audio innovation and AI promises an even more dynamic landscape: from real-time captioning in your native language to audio filtering, to smarter meeting tools that capture not only what is said but how it’s said, and to technologies that disappear into the background while amplifying the human voice at the center.

“There’s a future out there where this technology can really be something that helps bring people together,” says Vaveris. “Now that we have so many years of history with the internet, we know there’s usually two sides to the coin of technology, but there’s definitely going to be a positive side to this, and I’m really looking forward to it.

In a world increasingly mediated by screens, sound may prove to be the most powerful connector of all.

This episode of Business Lab is produced in partnership with Shure.

Full Transcript

Megan Tatum: From MIT Technology Review, I’m Megan Tatum, and this is Business Lab, the show that helps business leaders make sense of new technologies coming out of the lab and into the marketplace.

This episode is produced in partnership with Shure.

Our topic today is the power of sound. As our personal and professional lives become increasingly virtual, audio is emerging as an essential tool for everything from remote work to virtual conferences to virtual happy hour. While appearance is often top of mind in video conferencing and streaming, audio can be as or even more important, not only to effective communication, but potentially to brand equity for both the speaker and the company.

Two words for you: crystal clear.

My guests today are Erik Vaveris, VP of Product Management and Chief Marketing Officer at Shure, and Brian Scholl, Director of the Perception & Cognition Laboratory at Yale University.

Welcome, Erik and Brian.

Erik Vaveris: Thank you, Megan. And hello, Brian. Thrilled to be here today.

Brian Scholl: Good afternoon, everyone.

Megan: Fantastic. Thank you both so much for being here. Erik, let’s open with a bit of background. I imagine the pandemic changed the audio industry in some significant ways, given the pivot to our modern remote hybrid lifestyles. Could you talk a bit about that journey and some of the interesting audio advances that arose from that transformative shift?

Erik: Absolutely, Megan. That’s an interesting thing to think about now being here in 2025. And if you put yourself back in those moments in 2020, when things were fully shut down and everything was fully remote, the importance of audio quality became immediately obvious. As people adopted Zoom or Teams or platforms like that overnight, there were a lot of technical challenges that people experienced, but the importance of how they were presenting themselves to people via their audio quality was a bit less obvious. As Brian’s noted in a lot of the press that he’s received for his wonderful study, we know how we look on video. We can see ourselves back on the screen, but we don’t know how we sound to the people with whom we’re speaking.

If a meeting participant on the other side can manage to parse the words that you’re saying, they’re not likely to speak up and say, “Hey, I’m having a little bit of trouble hearing you.” They’ll just let the meeting continue. And if you don’t have a really strong level of audio quality, you’re asking the people that you’re talking to devote way too much brainpower to just determining the words that you’re saying. And you’re going to be fatiguing to listen to. And your message won’t come across. In contrast, if you’re willing to take a little bit of time with your audio set up, you can really get across the full power of your message and the full power of who you are to your peers, to your employees, your boss, your suppliers, and of course your customers. Back in 2020, this very quickly became a marketing story that we had to tell immediately.

And I have to say, it’s so gratifying to see Brian’s research in the news because, to me, it was like, “Yes, this is what we’ve been experiencing. And this is what we’ve been trying to educate people about.” Having the real science to back it up means a lot. But from that, development on improvements to key audio processing algorithms accelerated across the whole AV industry.

I think, Megan and Brian, you probably remember hearing loud keyboard clicking when you were on calls and meetings, or people eating potato chips and things like that back on those. But you don’t hear that much today because most platforms have invested in AI-trained algorithms to remove undesirable noises. And I know we’re going to talk more about that later on.

But the other thing that happened, thankfully, was that as we got into the late spring and summer of 2020, was that educational institutions, especially universities, and also businesses realized that things were going to need to change quickly. Nothing was going to be the same. And universities realized that all classrooms were going to need hybrid capabilities for both remote students and students in the classroom. And that helped the market for professional AV equipment start to recover because we had been pretty much completely shut down in the earlier months. But that focus on hybrid meeting spaces of all types accelerated more investment and more R&D into making equipment and further developing those key audio processing algorithms for more and different types of spaces and use cases. And since then, we’ve really seen a proliferation of different types of unobtrusive audio capture devices based on arrays of microphones and the supporting signal processing behind them. And right now, machine-learning-trained signal processing is really the norm. And that all accelerated, unfortunately, because of the pandemic.

Megan: Yeah. Such an interesting period of change, as you say. And Brian, what did you observe and experience in academia during that time? How did that time period affect the work at your lab?

Brian: I’ll admit, Megan, I had never given a single thought to audio quality or anything like that, certainly until the pandemic hit. I was thrown into this, just like the rest of the world was. I don’t believe I’d ever had a single video conference with a student or with a class or anything like that before the pandemic hit. But in some ways, our experience in universities was quite extreme. I went on a Tuesday from teaching an in-person class with 300 students to being on Zoom with everyone suddenly on a Thursday. Business meetings come in all shapes and sizes. But this was quite extreme. This was a case where suddenly I’m talking to hundreds and hundreds of people over Zoom. And every single one of them knows exactly what I sound like, except for me, because I’m just speaking my normal voice and I have no idea how it’s being translated through all the different levels of technology.

I will say, part of the general rhetoric we have about the pandemic focuses on all the negatives and the lack of personal connection and nuance and the fact that we can’t see how everyone’s paying attention to each other. Our experience was a bit more mixed. I’ll just tell you one anecdote. Shortly after the pandemic started, I started teaching a seminar with about 20 students. And of course, this was still online. What I did is I just invited, for whatever topic we were discussing on any given day, I sent a note to whoever was the clear world leader in the study of whatever that topic was. I said, “Hey, don’t prepare a talk. You don’t have to answer any questions. But just come join us on Zoom and just participate in the conversation. The students will have read some of your work.”

Every single one of them said, “Let me check my schedule. Oh, I’m stuck at home for a year. Sure. I’d be happy to do that.” And that was quite a positive. The students got to meet a who’s who of cognitive science from this experience. And it’s true that there were all these technological difficulties, but that would never, ever have happened if we were teaching the class in real life. That would’ve just been way too much travel and airfare and hotel and scheduling and all of that. So, it was a mixed bag for us.

Megan: That’s fascinating.

Erik: Yeah. Megan, can I add?

Megan: Of course.

Erik: That is really interesting. And that’s such a cool idea. And it’s so wonderful that that worked out. I would say that working for a global company, we like to think that, “Oh, we’re all together. And we’re having these meetings. And we’re in the same room,” but the reality was we weren’t in the same room. And there hadn’t been enough attention paid to the people who were conferencing in speaking not their native language in a different time zone, maybe pretty deep into the evening, in some cases. And the remote work that everybody got thrown into immediately at the start of the pandemic did force everybody to start to think more about those types of interactions and put everybody on a level playing field.

And that was insightful. And that helped some people have stronger voices in the work that we were doing than they maybe did before. And it’s also led businesses really across the board, there’s a lot written about this, to be much more focused on making sure that participants from those who may be remote at home, may be in the office, may be in different offices, may be in different time zones, are all able to participate and collaborate on really a level playing field. And that is a positive. That’s a good thing.

Megan: Yeah. There are absolutely some positive side effects there, aren’t there? And it inspired you, Brian, to look at this more closely. And you’ve done a study that shows poor audio quality can actually affect the perception of listeners. So, I wonder what prompted the study, in particular. And what kinds of data did you gather? What methodology did you use?

Brian: Yeah. The motivation for this study was actually a real-world experience, just like we’ve been talking about. In addition to all of our classes moving online with no notice whatsoever, the same thing was true of our departmental faculty meetings. Very early on in the pandemic, we had one of these meetings. And we were talking about some contentious issue about hiring or whatever. And two of my colleagues, who I’d known very well and for many, many years, spoke up to offer their opinions. And one of these colleagues is someone who I’m very close with. We almost always see eye to eye. He was actually a former graduate student of mine once upon a time. And we almost always see eye to eye on things. He happened to be participating in that meeting from an old not-so-hot laptop. His audio quality had that sort of familiar tinny quality that we’re all familiar with. I could totally understand everything he was saying, but I found myself just being a little skeptical.

I didn’t find his points so compelling as usual. Meanwhile, I had another colleague, someone who I deeply respect, I’ve collaborated with, but we don’t always see eye to eye on these things. And he was participating in this first virtual faculty meeting from his home recording studio. Erik, I don’t know if his equipment would be up to your level or not, but he sounded better than real life. He sounded like he was all around us. And I found myself just sort of naturally agreeing with his points, which sort of was notable and a little surprising in that context. And so, we turned this into a study.

We played people a number of short audio clips, maybe like 30 seconds or so. And we had these being played in the context of very familiar situations and decisions. One of them might be like a hiring decision. You would have to listen to this person telling you why they think they might be a good fit for your job. And then afterwards, you had to make a simple judgment. It might be of a trait. How intelligent did that person seem? Or it might be a real-world decision like, “Hey, based on this, how likely would you be to pursue trying to hire them?” And critically, we had people listen to exactly the same sort of scripts, but with a little bit of work behind the scenes to affect the audio quality. In one case, the audio sounded crisp and clear. Recorded with a decent microphone. And here’s what it sounded like.

Audio Clip: After eight years in sales, I’m currently seeking a new challenge which will utilize my meticulous attention to detail and friendly professional manner. I’m an excellent fit for your company and will be an asset to your team as a senior sales manager.

Brian: Okay. Whatever you think of the content of that message, at least it’s nice and clear. Other subjects listened to exactly the same recording. But again, it had that sort of tinny quality that we’re all familiar with when people’s voices are filtered through a microphone or a recording setup that’s not so hot. That sounded like this.

Audio Clip: After eight years in sales, I’m currently seeking a new challenge which will utilize my meticulous attention to detail and friendly professional manner. I’m an excellent fit for your company and will be an asset to your team as a senior sales manager.

Brian: All right. Now, the thing that I hope you can get from that recording there is that although it clearly has this what we would call, as a technical term, a disfluent sound, it’s just a little harder to process, you are ultimately successful, right? Megan, Erik, you were able to understand the words in that second recording.

Megan: Yeah.

Erik: Mm-hmm.

Brian: And we made sure this was true for all of our subjects. We had them do word-for-word transcription after they made these judgments. And I’ll also just point out that this kind of manipulation clearly can’t be about the person themselves, right? You couldn’t make your voices sound like that in real world conversation if you tried. Voices just don’t do those sorts of things. Nevertheless, in a way that sort of didn’t make sense, that was kind of irrational because this couldn’t reflect the person, this affected all sorts of judgments about people.

So, people were judged to be about 8% less hirable. They were judged to be about 8% less intelligent. We also did this in other contexts. We did this in the context of dateability as if you were listening to a little audio clip from someone who was maybe interested in dating you, and then you had to make a judgment of how likely would you be to date this person. Same exact result. People were a little less datable when their audio was a little more tinny, even though they were completely understandable.

The experiment, the result that I thought was in some ways most striking is one of the clips was about someone who had been in a car accident. It was a little narrative about what had happened in the car accident. And they were talking as if to the insurance agent. They were saying, “Hey, it wasn’t my fault. This is what happened.” And afterwards, we simply had people make a natural intuitive judgment of how credible do you think the person’s story was. And when it was recorded with high-end audio, these messages were judged to be about 8% more credible in this context. So those are our experiments. What it shows really is something about the power of perception. We know that that sort of sound doesn’t reflect the people themselves, but we really just can’t stop ourselves from having those impressions made. And I don’t know about you guys, but, Erik, I think you’re right, that we all understand intuitively that if we’re having difficulty being understood while we’re talking, then that’s bad. But we sort of think that as long as you can make out the words I’m saying, then that’s probably all fine. And this research showed in a somewhat surprising way to a surprising degree that this is not so.

Megan: It’s absolutely fascinating.

Erik: Wow.

Megan: From an industry perspective, Erik, what are your thoughts on those study results? Did it surprise you as well?

Erik: No, like I said, I found it very, very gratifying because we invest a lot in trying to make sure that people understand the importance of quality audio, but we kind of come about that intuitively. Our entire company is audio people. So of course, we think that. And it’s our mission to help other people achieve those higher levels of audio in everything that they do, whether you’re a minister at a church or you’re teaching a class or you’re performing on stage. When I first saw in the news about Brian’s study, I think it was the NPR article that just came up in one of my feeds. I read it and it made me feel like my life’s work has been validated to some extent. I wouldn’t say we were surprised by it, but iIt made a lot of sense to us. Let’s put it that way.

Megan: And how-

Brian: This is what we’re hearing. Oh, sorry. Megan, I was going to say this is what we’re hearing from a lot of the audio professionals as they’re saying, “Hey, you scientists, you finally caught up to us.” But of course-

Erik: I wouldn’t say it that way, Brian.

Brian: Erik, you’re in an unusual circumstance because you guys think about audio every day. When we’re on Zoom, look, I can see the little rectangle as well as you can. I can see exactly how I look like. I can check the lighting. I check my hair. We all do that every day. But I would say most people really, they use whatever microphone came with their setup, and never give a second thought to what they sound like because they don’t know what they sound like.

Megan: Yeah. Absolutely.

Erik: Absolutely.

Megan: Avoid listening to yourself back as well. I think that’s common. We don’t scrutinize audio as much as we should. I wonder, Erik, since the study came out, how are you seeing that research play out across industry? Can you talk a bit about the importance of strong, clear audio in today’s virtual world and the challenges that companies and employees are facing as well?

Erik: Yeah. Sure, Megan. That’s a great question. And studies kind of back this up, businesses understand that collaboration is the key to many things that we do. They know that that’s critical. And they are investing in making the experiences for the people at work better because of that knowledge, that intuitive understanding. But there are challenges. It can be expensive. You need solutions that people who are going to walk into a room or join a meeting on their personal device, that they’re motivated to use and that they can use because they’re simple. You also have to overcome the barriers to investment. We in the AV industry have had to look a lot at how can we bring down the overall cost of ownership of setting up AV technology because, as we’ve seen, the prices of everything that goes into making a product are not coming down.

Simplifying deployment and management is critical. Beyond just audio technology, IoT technology and cloud technology for IT teams to be able to easily deploy and manage classrooms across an entire university campus or conference rooms across a global enterprise are really, really critical. And those are quickly evolving. And integrations with more standard common IT tools are coming out. And that’s one area. Another thing is just for the end user, having the same user interface in each conference room that is familiar to everyone from their personal devices is also important. For many, many years, a lot of people had the experience where, “Hey, it’s time we’re going to actually do a conference meeting.” And you might have a few rooms in your company or in your office area that could do that. And you walk into the meeting room. And how long does it take you to actually get connected to the people you’re going to talk with?

There was always a joke that you’d have to spend the first 15 minutes of a meeting working all of that out. And that’s because the technology was fragmented and you had to do a lot of custom work to make that happen. But these days, I would say platforms like Zoom and Teams and Google and others are doing a really great job with this. If you have the latest and greatest in your meeting rooms and you know how to join from your own personal device, it’s basically the same experience. And that is streamlining the process for everyone. Bringing down the costs of owning it so that companies can get to those benefits to collaboration is kind of the key.

Megan: I was going to ask if we could dive a little deeper into that kind of audio quality, the technological advancements that AI has made possible, which you did touch on slightly there, Erik. What are the most significant advancements, in your view? And how are those impacting the ways we use audio and the things we can do with it?

Erik: Okay. Let me try to break that down into-

Megan: That’s a big question. Sorry.

Erik: … a couple different sections. Yeah. No, and one that’s just so exciting. Machine-learning-based digital signal processing, or DSP, is here and is the norm now. If you think about the beginning of telephones and teleconferencing, just going way back, one of the initial problems you had whenever you tried to get something out of a dedicated handset onto a table was echo. And I’m sure we’ve all heard that at some point in our life. You need to have a way to cancel echo. But by the way, you also want people to be able to speak at the same time on both ends of a call. You get to some of those very rudimentary things. Machine learning is really supercharging those algorithms to provide better performance with fewer trade-offs, fewer artifacts in the actual audio signal.

Noise reduction has come a long way. I mentioned earlier on, keyboard sounds and the sounds of people eating, and how you just don’t hear that anymore, at least I don’t when I’m on conference calls. But only a few years ago, that could be a major problem. The machine-learning-trained digital signal processing is in the market now and it’s doing a better job than ever in removing things that you don’t want from your sound. We have a new de-verberation algorithm, so if you have a reverberant room with echoes and reflections that’s getting into the audio signal, that can degrade the experience there. We can remove that now. Another thing, the flip side of that is that there’s also a focus on isolating the sound that you do want and the signal that you do want.

Microsoft has rolled out a voice print feature in Teams that allows you, if you’re willing, to provide them with a sample of your voice. And then whenever you’re talking from your device, it will take out anything else that the microphone may be picking up so that even if you’re in a really noisy environment outdoors or, say, in an airport, the people that you’re speaking with are going to hear you and only you. And it’s pretty amazing as well. So those are some of the things that are happening today and are available today.

Another thing that’s emerged from all of this is we’ve been talking about how important audio quality is to the people participating in a discussion, the people speaking, the people listening, how everyone is perceived, but a new consumer, if you will, of audio in a discussion or a meeting has emerged, and that is in the form of the AI agent that can summarize meetings and create action plans, do those sorts of things. But for it to work, a clean transcription of what was said is already table stakes. It can’t garbled. It can’t miss key things. It needs to get it word for word, sentence for sentence throughout the entire meeting. And the ability to attribute who said what to the meeting participants, even if they’re all in the same room, is quickly upon us. And the ability to detect and integrate sentiment and emotion of the participants is going to become very important as well for us to really get the full value out of those kinds of AI agents.

So audio quality is as important as ever for humans, as Brian notes, in some ways more important because this is now the normal way that we talk and meet, but it’s also critical for AI agents to work properly. And it’s different, right? It’s a different set of considerations. And there’s a lot of emerging thought and work that’s going into that as well. And boy, Megan, there’s so much more we could say about this beyond meetings and video conferences. AI tools to simplify the production process. And of course, there’s generative AI of music content. I know that’s beyond the scope of what we’re talking about. But it’s really pretty incredible when you look around at the work that’s happening and the capabilities that are emerging.

Megan: Yeah. Absolutely. Sounds like there are so many elements to consider and work going on. It’s all fascinating. Brian, what kinds of emerging capabilities and use cases around AI and audio quality are you seeing in your lab as well?

Brian: Yeah. Well, I’m sorry that Brian himself was not able to be here today, but I’m an AI agent.

Megan: You got me for a second there.

Brian: Just kidding. The fascinating thing that we’re seeing from the lab, from the study of people’s impressions is that all of this technology that Erik has described, when it works best, it’s completely invisible. Erik, I loved your point about not hearing potato chips being eaten or rain in the background or something like that. You’re totally right. I used to notice that all the time. I don’t think I’ve noticed that recently, but I also didn’t notice that I haven’t noticed that recently, right? It just kind of disappears. The interesting thing about these perceptual impressions, we’re constantly drawing intuitive conclusions about people based on how they sound. And that might be a good thing or a bad thing when we’re judging things like trustworthiness, for example, on the basis of a short audio clip.

But clearly, some of these things are valid, right? We can judge the size of someone or even of an animal based on how they sound, right? A chihuahua can’t make the sound of a lion. A lion can’t make the sound of a chihuahua. And that’s always been true because we’re producing audio signals that go right into each other’s ears. And now, of course, everything that Erik is talking about, that’s not true. It goes through all of these different layers of technology increasingly fueled by AI. But when that technology works the best way, it’s as if it isn’t there at all and we’re just hearing each other directly.

Erik: That’s the goal, right? That it’s seamless open communication and we don’t have to think about the technology anymore.

Brian: It’s a tough business to be in, I think, though, Erik, because people have to know what’s going on behind the surface in order to value it. Otherwise, we just expect it to work.

Erik: Well, that’s why we try to put the logo of our products on the side of them so they show up in the videos. But yeah, it’s a good point.

Brian: Very good. Very good.

Erik: Yeah.

Megan: And we’ve talked about virtual meetings and conversations quite a bit, but there’s also streamed and recorded content, which are increasingly important at work as well. I wondered, Erik, if you could talk a bit about how businesses are leveraging audio in new ways for things like marketing campaigns and internal upskilling and training and areas like that?

Erik: Yeah. Well, one of the things I think we’ve all seen in marketing is that not everything is a high production value commercial anymore. And there’s still a place for that, for sure. But people tend to trust influencers that they follow. People search on TikTok, on YouTube for topics. Those can be the place that they start. And as technology’s gotten more accessible, not just audio, but of course, the video technology too, content creators can produce satisfying content on their own or with just a couple of people with them. And Brian’s study shows that it doesn’t really matter what the origins of the content are for it to be compelling.

For the person delivering the message to be compelling, the audio quality does have to hit a certain level. But because the tools are simpler to use and you need less things to connect and pull together a decent production system, creator-driven content is becoming even more and more integral to a marketing campaign. And so not just what they maybe post on their Instagram page or post on LinkedIn, for example, but us as a brand being able to take that content and use that actually in paid media and things like that is all entirely possible because of the overall quality of the content. So that’s something that’s been a trend that’s been in process really, I would say, maybe since the advent of podcasts. But it’s been an evolution. And it’s come a long, long way.

Another thing, and this is really interesting, and this hits home personally, but I remember when I first entered the workforce, and I hope I’m not showing my age too badly here, but I remember the word processing department. And you would write down on a piece of paper, like a memo, and you would give it to the word processing department and somebody would type it up for you. That was a thing. And these days, we’re seeing actually more and more video production with audio, of course, transfer to the actual producers of the content.

In my company, at Shure, we make videos for different purposes to talk about different initiatives or product launches or things that we’re doing just for internal use. And right now, everybody, including our CEO, she makes these videos just at her own desk. She has a little software tool and she can show a PowerPoint and herself and speak to things. And with very, very limited amount of editing, you can put that out there. And I’ve seen friends and colleagues at other companies in very high-level roles just kind of doing their own production. Being able to buy a very high quality microphone with really advanced signal processing built right in, but just plug it in via USB and have it be handled as simply as any consumer device, has made it possible to do really very useful production where you are going to actually sound good and get your message across, but without having to make such a big production out of it, which is kind of cool.

Megan: Yeah. Really democratizes access to sort of creating high quality content, doesn’t it? And of course, no technology discussion is complete without a mention of return on investment, particularly nowadays. Erik, what are some ways companies can get returns on their audio tech investments as well? Where are the most common places you see cost savings?

Erik: Yeah. Well, we collaborated on a study with IDC Research. And they came up with some really interesting findings on this. And one of them was, no surprise, two-thirds or more of companies have taken action on improving their communication and collaboration technology, and even more have additional or initial investments still planned. But the ROI of those initiatives isn’t really tied to the initiative itself. It’s not like when you come out with a new product, you look at how that product performs, and that’s the driver of your ROI. The benefits of smoother collaboration come in the form of shorter meetings, more productive meetings, better decision-making, faster decision-making, stronger teamwork. And so to build an ROI model, what IDC concluded was that you have to build your model to account for those advantages really across the enterprise or across your university, or whatever it may be, and kind of up and down the different set of activities where they’re actually going to be utilized.

So that can be complex. Quantifying things can always be a challenge. But like I said, companies do seem to understand this. And I think that’s because, this is just my hunch, but because everybody, including the CEO and the CFO and the whole finance department, uses and benefits from collaboration technology too. Perhaps that’s one reason why the value is easier to convey. Even if they have not taken the time to articulate things like we’re doing here today, they know when a meeting is good and when it’s not good. And maybe that’s one of the things that’s helping companies to justify these investments. But it’s always tricky to do ROI on projects like that. But again, focusing on the broader benefits of collaboration and breaking it down into what it means for specific activities and types of meetings, I think, is the way to go about doing that.

Megan: Absolutely. And Brian, what kinds of advancements are you seeing in the lab that perhaps one day might contribute to those cost savings?

Brian: Well, I don’t know anything about cost savings, Megan. I’m a college professor. I live a pure life of the mind.

Megan: Of course.

Brian: ROI does not compute for me. No, I would say we are in an extremely exciting frontier right now because of AI and many different technologies. The studies that we talked about earlier, in one sense, they were broad. We explored many different traits from dating to hiring to credibility. And we isolated them in all sorts of ways we didn’t talk about. We showed that it wasn’t due to overall affect or pessimism or something like that. But in those studies, we really only tested one very particular set of dimensions along which an audio signal can vary, which is some sort of model of clarity. But in reality, the audio signal is so multi-dimensional. And as we’re getting more and more tools these days, we can not only change audio along the lines of clarity, as we’ve been talking about, but we can potentially manipulate it in all sorts of ways.

We’re very interested in pushing these studies forward and in exploring how people’s sort of brute impressions that they make are affected by all sorts of things. Meg and Erik, we walk around the world all the time making these judgments about people, right? You meet someone and you’re like, “Wow, I could really be friends with them. They seem like a great person.” And you know that you’re making that judgment, but you have no idea why, right? It just seems kind of intuitive. Well, in an audio signal, when you’re talking to someone, you can think of, “What if their signal is more bass heavy? What if it’s a little more treble heavy? What if we manipulate it in this way? In that way?”

When we talked about the faculty meeting that motivated this whole research program, I mentioned that my colleague, who was speaking from his home recording studio, he actually didn’t sound clear like in real life. He sounded better than in real life. He sounded like he was all around us. What is the implication of that? I think there’s so many different dimensions of an audio signal that we’re just being able to readily control and manipulate that it’s going to be very exciting to see how all of these sorts of things impact our impressions of each other.

Megan: And there may be some overlap with this as well, but I wondered if we could close with a future forward look, Brian. What are you looking forward to in emerging audio technology? What are some exciting opportunities on the horizon, perhaps related to what you were just talking about there?

Brian: Well, we’re interested in studying this from a scientific perspective. Erik, you talked about how when you started. When I started doing this science, we didn’t have a word processing department. We had a stone tablet department. But I hear tell that the current generation, when they send photos back and forth to each other, that they, as a matter, of course, they apply all sorts of filters-

Erik: Oh, yes.

Brian: … to those video signals, those video or just photographic signals. We’re all familiar with that. That hasn’t quite happened with the audio signals yet, but I think that’s coming up as well. You can imagine that you record yourself saying a little message and then you filter it this way or that way. And that’s going to become the Wild West about the kinds of impressions we make on each other, especially if and when you don’t know that those filters have been operating in the first place.

Megan: That’s so interesting. Erik, what are you looking forward to in audio technology as well?

Erik: Well, I’m still thinking about what Brian said.

Megan: Yeah. That’s-

Erik: That’s very interesting.

Megan: It’s terrifying.

Erik: I have to go back again. I’ll go back to the past, maybe 15 to 20 years. And I remember at work, we had meeting rooms with the Starfish phones in the middle of the table. And I remember that we would have international meetings with our partners there that were selling our products in different countries, including in Japan and in China, and the people actually in our own company in those countries. We knew the time zone was bad. And we knew that English wasn’t their native language, and tried to be as courteous as possible with written materials and things like that. But I went over to China, and I had to actually be on the other end of one of those calls. And I’m a native English speaker, or at least a native Chicago dialect of American English speaker. And really understanding how challenging it was for them to participate in those meetings just hit me right between the eyes.

We’ve come so far, which is wonderful. But I think of a scenario, and this is not far off, there are many companies working on this right now, where not only can you get a real time captioning in your native language, no matter what the language of the participant, you can actually hear the person who’s speaking’s voice manipulated into your native language.

I’m never going to be a fluent Japanese or Chinese speaker, that’s for sure. But I love the thought that I could actually talk with people and they could understand me as though I were speaking their native language, and that they could communicate to me and I could understand them in the way that they want to be understood. I think there’s a future out there where this technology can really be something that helps bring people together. Now that we have so many years of history with the internet, we know there’s usually two sides to the coin of technology, but there’s definitely going to be a positive side to this, and I’m really looking forward to it.

Megan: Gosh, that sounds absolutely fascinating. Thank you both so much for such an interesting discussion.

That was Erik Vaveris, the VP of product management and chief marketing officer at Shure, and Brian Scholl, director of the Perception & Cognition Laboratory at Yale University, whom I spoke with from Brighton in England.

That’s it for this episode of Business Lab. I’m your host, Megan Tatum. I’m a contributing editor at Insights, the custom publishing division of MIT Technology Review. We were founded in 1899 at the Massachusetts Institute of Technology. And you can find us in print on the web and at events each year around the world. For more information about us and the show, please check out our website at technologyreview.com.

This show is available wherever you get your podcasts. If you enjoyed this episode, we hope you’ll take a moment to rate and review us. Business Lab is a production of MIT Technology Review. And this episode was produced by Giro Studios. Thanks for listening.

This content was produced by Insights, the custom content arm of MIT Technology Review. It was not written by MIT Technology Review’s editorial staff. It was researched, designed, and written entirely by human writers, editors, analysts, and illustrators. This includes the writing of surveys and collection of data for surveys. AI tools that may have been used were limited to secondary production processes that passed thorough human review.

Rethinking AI’s future in an augmented workplace

There are many paths AI evolution could take. On one end of the spectrum, AI is dismissed as a marginal fad, another bubble fueled by notoriety and misallocated capital. On the other end, it’s cast as a dystopian force, destined to eliminate jobs on a large scale and destabilize economies. Markets oscillate between skepticism and the fear of missing out, while the technology itself evolves quickly and investment dollars flow at a rate not seen in decades. 

All the while, many of today’s financial and economic thought leaders hold to the consensus that the financial landscape will stay the same as it has been for the last several years. Two years ago, Joseph Davis, global chief economist at Vanguard, and his team felt the same but wanted to develop their perspective on AI technology with a deeper foundation built on history and data. Based on a proprietary data set covering the last 130 years, Davis and his team developed a new framework, The Vanguard Megatrends Model, from research that suggested a more nuanced path than hype extremes: that AI has the potential to be a general purpose technology that lifts productivity, reshapes industries, and augments human work rather than displaces it. In short, AI will be neither marginal nor dystopian. 

“Our findings suggest that the continuation of the status quo, the basic expectation of most economists, is actually the least likely outcome,” Davis says. “We project that AI will have an even greater effect on productivity than the personal computer did. And we project that a scenario where AI transforms the economy is far more likely than one where AI disappoints and fiscal deficits dominate. The latter would likely lead to slower economic growth, higher inflation, and increased interest rates.”

Implications for business leaders and workers

Davis does not sugar-coat it, however. Although AI promises economic growth and productivity, it will be disruptive, especially for business leaders and workers in knowledge sectors. “AI is likely to be the most disruptive technology to alter the nature of our work since the personal computer,” says Davis. “Those of a certain age might recall how the broad availability of PCs remade many jobs. It didn’t eliminate jobs as much as it allowed people to focus on higher value activities.” 

The team’s framework allowed them to examine AI automation risks to over 800 different occupations. The research indicated that while the potential for job loss exists in upwards of 20% of occupations as a result of AI-driven automation, the majority of jobs—likely four out of five—will result in a mixture of innovation and automation. Workers’ time will increasingly shift to higher value and uniquely human tasks. 

This introduces the idea that AI could serve as a copilot to various roles, performing repetitive tasks and generally assisting with responsibilities. Davis argues that traditional economic models often underestimate the potential of AI because they fail to examine the deeper structural effects of technological change. “Most approaches for thinking about future growth, such as GDP, don’t adequately account for AI,” he explains. “They fail to link short-term variations in productivity with the three dimensions of technological change: automation, augmentation, and the emergence of new industries.” Automation enhances worker productivity by handling routine tasks; augmentation allows technology to act as a copilot, amplifying human skills; and the creation of new industries creates new sources of growth.

Implications for the economy 

Ironically, Davis’s research suggests that a reason for the relatively low productivity growth in recent years may be a lack of automation. Despite a decade of rapid innovation in digital and automation technologies, productivity growth has lagged since the 2008 financial crisis, hitting 50-year lows. This appears to support the view that AI’s impact will be marginal. But Davis believes that automation has been adopted in the wrong places. “What surprised me most was how little automation there has been in services like finance, health care, and education,” he says. “Outside of manufacturing, automation has been very limited. That’s been holding back growth for at least two decades.” The services sector accounts for more than 60% of US GDP and 80% of the workforce and has experienced some of the lowest productivity growth. It is here, Davis argues, that AI will make the biggest difference.

One of the biggest challenges facing the economy is demographics, as the Baby Boomer generation retires, immigration slows, and birth rates decline. These demographic headwinds reinforce the need for technological acceleration. “There are concerns about AI being dystopian and causing massive job loss, but we’ll soon have too few workers, not too many,” Davis says. “Economies like the US, Japan, China, and those across Europe will need to step up function in automation as their populations age.” 

For example, consider nursing, a profession in which empathy and human presence are irreplaceable. AI has already shown the potential to augment rather than automate in this field, streamlining data entry in electronic health records and helping nurses reclaim time for patient care. Davis estimates that these tools could increase nursing productivity by as much as 20% by 2035, a crucial gain as health-care systems adapt to ageing populations and rising demand. “In our most likely scenario, AI will offset demographic pressures. Within five to seven years, AI’s ability to automate portions of work will be roughly equivalent to adding 16 million to 17 million workers to the US labor force,” Davis says. “That’s essentially the same as if everyone turning 65 over the next five years decided not to retire.” He projects that more than 60% of occupations, including nurses, family physicians, high school teachers, pharmacists, human resource managers, and insurance sales agents, will benefit from AI as an augmentation tool. 

Implications for all investors 

As AI technology spreads, the strongest performers in the stock market won’t be its producers, but its users. “That makes sense, because general-purpose technologies enhance productivity, efficiency, and profitability across entire sectors,” says Davis. This adoption of AI is creating flexibility for investment options, which means diversifying beyond technology stocks might be appropriate as reflected in Vanguard’s Economic and Market Outlook for 2026. “As that happens, the benefits move beyond places like Silicon Valley or Boston and into industries that apply the technology in transformative ways.” And history shows that early adopters of new technologies reap the greatest productivity rewards. “We’re clearly in the experimentation phase of learning by doing,” says Davis. “Those companies that encourage and reward experimentation will capture the most value from AI.” 

Looking globally, Davis sees the United States and China as significantly ahead in the AI race. “It’s a virtual dead heat,” he says. “That tells me the competition between the two will remain intense.” But other economies, especially those with low automation rates and large service sectors, like Japan, Europe, and Canada, could also see significant benefits. “If AI is truly going to be transformative, three sectors stand out: health care, education, and finance,” says Davis. “For AI to live up to its potential, it must fundamentally reshape these industries, which face high costs and rising demand for better, faster, more personalized services.”

However, Davis says Vanguard is more bullish on AI’s potential to transform the economy than it was just a year ago. Especially since that transformation requires application beyond Silicon Valley. “When I speak to business leaders, I remind them that this transformation hasn’t happened yet,” says Davis. “It’s their investment and innovation that will determine whether it does.”

This content was produced by Insights, the custom content arm of MIT Technology Review. It was not written by MIT Technology Review’s editorial staff. It was researched, designed, and written by human writers, editors, analysts, and illustrators. This includes the writing of surveys and collection of data for surveys. AI tools that may have been used were limited to secondary production processes that passed thorough human review.

The era of agentic chaos and how data will save us

AI agents are moving beyond coding assistants and customer service chatbots into the operational core of the enterprise. The ROI is promising, but autonomy without alignment is a recipe for chaos. Business leaders need to lay the essential foundations now.

The agent explosion is coming

Agents are independently handling end-to-end processes across lead generation, supply chain optimization, customer support, and financial reconciliation. A mid-sized organization could easily run 4,000 agents, each making decisions that affect revenue, compliance, and customer experience. 

The transformation toward an agent-driven enterprise is inevitable. The economic benefits are too significant to ignore, and the potential is becoming a reality faster than most predicted. The problem? Most businesses and their underlying infrastructure are not prepared for this shift. Early adopters have found unlocking AI initiatives at scale to be extremely challenging. 

The reliability gap that’s holding AI back

Companies are investing heavily in AI, but the returns aren’t materializing. According to recent research from Boston Consulting Group, 60% of companies report minimal revenue and cost gains despite substantial investment. However, the leaders reported they achieved five times the revenue increases and three times the cost reductions. Clearly, there is a massive premium for being a leader. 

What separates the leaders from the pack isn’t how much they’re spending or which models they’re using. Before scaling AI deployment, these “future-built” companies put critical data infrastructure capabilities in place. They invested in the foundational work that enables AI to function reliably. 

A framework for agent reliability: The four quadrants

To understand how and where enterprise AI can fail, consider four critical quadrants: models, tools, context, and governance.

Take a simple example: an agent that orders you pizza. The model interprets your request (“get me a pizza”). The tool executes the action (calling the Domino’s or Pizza Hut API). Context provides personalization (you tend to order pepperoni on Friday nights at 7pm). Governance validates the outcome (did the pizza actually arrive?). 

Each dimension represents a potential failure point:

  • Models: The underlying AI systems that interpret prompts, generate responses, and make predictions
  • Tools: The integration layer that connects AI to enterprise systems, such as APIs, protocols, and connectors 
  • Context: Before making decisions, information agents need to understand the full business picture, including customer histories, product catalogs, and supply chain networks
  • Governance: The policies, controls, and processes that ensure data quality, security, and compliance

This framework helps diagnose where reliability gaps emerge. When an enterprise agent fails, which quadrant is the problem? Is the model misunderstanding intent? Are the tools unavailable or broken? Is the context incomplete or contradictory? Or is there no mechanism to verify that the agent did what it was supposed to do?

Why this is a data problem, not a model problem

The temptation is to think that reliability will simply improve as models improve. Yet, model capability is advancing exponentially. The cost of inference has dropped nearly 900 times in three years, hallucination rates are on the decline, and AI’s capacity to perform long tasks doubles every six months.

Tooling is also accelerating. Integration frameworks like the Model Context Protocol (MCP) make it dramatically easier to connect agents with enterprise systems and APIs.

If models are powerful and tools are maturing, then what is holding back adoption?

To borrow from James Carville, “It is the data, stupid.” The root cause of most misbehaving agents is misaligned, inconsistent, or incomplete data.

Enterprises have accumulated data debt over decades. Acquisitions, custom systems, departmental tools, and shadow IT have left data scattered across silos that rarely agree. Support systems do not match what is in marketing systems. Supplier data is duplicated across finance, procurement, and logistics. Locations have multiple representations depending on the source.

Drop a few agents into this environment, and they will perform wonderfully at first, because each one is given a curated set of systems to call. Add more agents and the cracks grow, as each one builds its own fragment of truth.

This dynamic has played out before. When business intelligence became self-serve, everyone started creating dashboards. Productivity soared, reports failed to match. Now imagine that phenomenon not in static dashboards, but in AI agents that can take action. With agents, data inconsistency produces real business consequences, not just debates among departments.

Companies that build unified context and robust governance can deploy thousands of agents with confidence, knowing they’ll work together coherently and comply with business rules. Companies that skip this foundational work will watch their agents produce contradictory results, violate policies, and ultimately erode trust faster than they create value.

Leverage agentic AI without the chaos 

The question for enterprises centers on organizational readiness. Will your company prepare the data foundation needed to make agent transformation work? Or will you spend years debugging agents, one issue at a time, forever chasing problems that originate in infrastructure you never built?

Autonomous agents are already transforming how work gets done. But the enterprise will only experience the upside if those systems operate from the same truth. This ensures that when agents reason, plan, and act, they do so based on accurate, consistent, and up-to-date information. 

The companies generating value from AI today have built on fit-for-purpose data foundations. They recognized early that in an agentic world, data functions as essential infrastructure. A solid data foundation is what turns experimentation into dependable operations.

At Reltio, the focus is on building that foundation. The Reltio data management platform unifies core data from across the enterprise, giving every agent immediate access to the same business context. This unified approach enables enterprises to move faster, act smarter, and unlock the full value of AI.

Agents will define the future of the enterprise. Context intelligence will determine who leads it.

For leaders navigating this next wave of transformation, see Relatio’s practical guide:
Unlocking Agentic AI: A Business Playbook for Data Readiness. Get your copy now to learn how real-time context becomes the decisive advantage in the age of intelligence. 

Reimagining ERP for the agentic AI era

The story of enterprise resource planning (ERP) is really a story of businesses learning to organize themselves around the latest, greatest technology of the times. In the 1960s through the ’80s, mainframes, material requirements planning (MRP), and manufacturing resource planning (MRP II) brought core business data from file cabinets to centralized systems. Client-server architectures defined the ’80s and ’90s, taking digitization mainstream during the internet’s infancy. And in the 21st century, as work moved beyond the desktop, SaaS and cloud ushered in flexible access and elastic infrastructure.

The rise of composability and agentic AI marks yet another dawn—and an apt one for the nascent intelligence age. Composable architectures let organizations assemble capabilities from multiple systems in a mix-and-match fashion, so they can swap vendor gridlock for an à la carte portfolio of fit-for-purpose modules. On top of that architectural shift, agentic AI enables coordination across systems that weren’t originally designed to talk to one another.

Early indicators suggest that AI-enabled ERP will yield meaningful performance gains: One 2024 study found that organizations implementing AI-driven ERP solutions stand to gain around a 30% boost in user satisfaction and a 25% lift in productivity; another suggested that AI-driven ERP can lead to processing time savings of up to 45%, as well as improvements in decision accuracy to the tune of 60%.

These dual advancements address long-standing gaps that previous ERP eras fell short of delivering: freedom to innovate outside of vendor roadmaps, capacity for rapid iteration, and true interoperability across all critical functions. This shift signals the end of monolithic dependency as well as a once-in-a-generation opportunity for early movers to gain a competitive edge.

Key takeaways include:

  • Enterprises are moving away from monolithic ERP vendor upgrades in favor of modular architectures that allow them to change or modernize components independently while keeping a stable core for essential transactions.
  • Agentic AI is a timely complement to composability, functioning as a UX and orchestration layer that can coordinate workflows across disparate systems and turn multi-step processes into automated, cross-platform operations.
  • These dual shifts are finally enabling technology architecture to organize around the business, instead of the business around the ERP. Companies can modernize by reconfiguring and extending what they already have, rather than relying on ERP-centric upgrades.

Download the report.

This content was produced by Insights, the custom content arm of MIT Technology Review. It was not written by MIT Technology Review’s editorial staff. It was researched, designed, and written by human writers, editors, analysts, and illustrators. This includes the writing of surveys and collection of data for surveys. AI tools that may have been used were limited to secondary production processes that passed thorough human review.

Going beyond pilots with composable and sovereign AI

Today marks an inflection point for enterprise AI adoption. Despite billions invested in generative AI, only 5% of integrated pilots deliver measurable business value and nearly one in two companies abandons AI initiatives before reaching production.

The bottleneck is not the models themselves. What’s holding enterprises back is the surrounding infrastructure: Limited data accessibility, rigid integration, and fragile deployment pathways prevent AI initiatives from scaling beyond early LLM and RAG experiments. In response, enterprises are moving toward composable and sovereign AI architectures that lower costs, preserve data ownership, and adapt to the rapid, unpredictable evolution of AI—a shift IDC expects 75% of global businesses to make by 2027.

The concept to production reality

AI pilots almost always work, and that’s the problem. Proofs of concept (PoCs) are meant to validate feasibility, surface use cases, and build confidence for larger investments. But they thrive in conditions that rarely resemble the realities of production.

Source: Compiled by MIT Technology Review Insights with data from Informatica, CDO Insights 2025 report, 2026

“PoCs live inside a safe bubble” observes Cristopher Kuehl, chief data officer at Continent 8 Technologies. Data is carefully curated, integrations are few, and the work is often handled by the most senior and motivated teams.

The result, according to Gerry Murray, research director at IDC, is not so much pilot failure as structural mis-design: Many AI initiatives are effectively “set up for failure from the start.”

Download the article.

Securing digital assets as crypto crime surges

In February 2025, cyberattackers thought to be linked to North Korea executed a sophisticated supply chain attack on cryptocurrency exchange Bybit. By targeting its infrastructure and multi-signature security process, hackers managed to steal more than $1.5 billion worth of Ethereum in the largest known digital-asset theft to date.

The ripple effects were felt across the cryptocurrency market, with the price of Bitcoin dropping 20% from its record high in January. And the massive losses put 2025 on track to be the worst year in history for cryptocurrency theft.

Bitcoin, Ethereum, and stablecoins have established themselves as benchmark monetary vehicles, and, despite volatility, their values continue to rise. In October 2025, the value of cryptocurrency and other digital assets topped $4 trillion.

Yet, with this burgeoning value and liquidity comes more attention from cybercriminals and digital thieves. The Bybit attack demonstrates how focused sophisticated attackers are on finding ways to break the security measures that guard the crypto ecosystem, says Charles Guillemet, chief technology officer of Ledger, a provider of secure signer platforms.

”The attackers were very well organized, they have plenty of money, and they are spending a lot of time and resources trying to attack big stuff, because they can,” he says. “In terms of opportunity costs, it’s a big investment, but if at the end they earn $1.4 billion it makes sense to do this investment.”

But it also demonstrates how the crypto threat landscape has pitfalls not just for the unwary but for the tech savvy too. On the one hand, cybercriminals are using techniques like social engineering to target end users. On the other, they are increasingly looking for vulnerabilities to exploit at different points in the cryptocurrency infrastructure.

Historically, owners of digital assets have had to stand against these attackers alone. But now, cybersecurity firms and cryptocurrency-solution providers are offering new solutions, powered by in-depth threat research.

A treasure trove for attackers

One of the advantages of cryprocurrency is self custody. Users can save their private keys—the critical piece of alphanumeric code that proves ownership and grants full control over digital assets—into either a software or hardware wallet to safeguard it.

But users must put their faith in the security of the wallet technology, and, because the data is the asset, if the keys are lost or forgotten, the value too can be lost.

”If I hack your credit card, what is the issue? You will call your bank, and they will manage to revert the operations,” says Vincent Bouzon, head of the Donjon research team at Ledger. “The problem with crypto is, if something happens, it’s too late. So we must eliminate the possibility of vulnerabilities and give users security.”

Increasingly, attackers are focusing on digital assets known as stablecoins, a form of cryptocurrency that is pegged to the value of a hard asset, such as gold, or a fiat currency, like the US dollar.

Stablecoins rely on smart contracts—digital contracts stored on blockchain that use pre-set code to manage issuance, maintain value, and enforce rules—that can be vulnerable to different classes of attacks, often taking advantage of users’ credulity or lack of awareness about the threats. Post-theft countermeasures, such as freezing the transfer of coins and blacklisting of addresses, can lessen the risk with these kinds of attacks, however.

Understanding vulnerabilities

Software-based wallets, also known as “hot wallets,” which are applications or programs that run on a user’s computer, phone, or web browser, are often a weak link. While their connection to the internet makes them convenient for users, it also makes them more readily accessible to hackers too.

“If you are using a software wallet, by design it’s vulnerable because your keys are stored inside your computer or inside your phone. And unfortunately, a phone or a computer is not designed for security.” says Guillemet.

The rewards for exploiting this kind of vulnerability can be extensive. Hackers who stole credentials in a targeted attack on encrypted password manager application LastPass in 2022 managed to transfer millions worth of cryptocurrency away from victims in the subsequent two or more years. 

Even hardware-based wallets, which often resemble USB drives or key fobs and are more secure than their software counterparts since they are completely offline, can have vulnerabilities that a diligent attacker might find and exploit.

Tactics include the use of side-channel attacks, for example, where a cycbercriminal observes a system’s physical side effects, like timing, power, or electromagnetic and acoustic emissions to gain information about the implementation of an algorithm.

Guillemet explains that cybersecurity providers building digital asset solutions, such as wallets, need to help minimize the burden on the users by building security features and providing education about enhancing defense.

For businesses to protect cryptocurrency, tokens, critical documents, or other digital assets, this could be a platform that allows multi-stakeholder custody and governance, supports software and hardware protections, and allows for visibility of assets and transactions through Web3 checks.

Developing proactive security measures

As the threat landscape evolves at breakneck speed, in-depth research conducted by attack labs like Ledger Donjon can help security firms keep pace. The team at Ledger Donjon are working to understand how to proactively secure the digital asset ecosystem and set global security standards.

Key projects include the team’s offensive security research, which uses ethical and white hat hackers to simulate attacks and uncover weaknesses in hardware wallets, cryptographic systems, and infrastructure.

In November 2022, the Donjon team discovered a vulnerability in Web3 wallet platform Trust Wallet, which had been acquired by Binance. They found that the seed-phrase generation was not random enough, allowing the team to compute all possible private keys and putting as much as $30 million stored in Trust Wallet accounts at risk, says Bouzon. “The entropy was not high enough, the entropy was only 4 billion. It was huge, but not enough,” he says.

To enhance overall safety there are three key principles that digital-asset protection platforms should apply, says Bouzon. First, security providers should create secure algorithms to generate the seed phrases for private keys and conduct in-depth security audits of the software. Second, users should use hardware wallets with a secure screen instead of software wallets. And finally, any smart contract transaction should include visibility into what is being signed to avoid blind signing attacks.

Ultimately, the responsibility for safeguarding these valuable assets lies on both digital asset solution providers and the users themselves. As the value of cryptocurrencies continues to grow so too will the threat landscape as hackers keep attempting to circumvent new security measures. While digital asset providers, security firms, and wallet solutions must work to build strong and simple protection to support the cryptocurrency ecosystems, users must also seek out the information and education they need to proactively protect themselves and their wallets.

Learn more about how to secure digital assets in the Ledger Academy.

This content was produced by Insights, the custom content arm of MIT Technology Review. It was not written by MIT Technology Review’s editorial staff.

This content was researched, designed, and written by human writers, editors, analysts, and illustrators. This includes the writing of surveys and collection of data for surveys. AI tools that may have been used were limited to secondary production processes that passed thorough human review.