Generative AI is one of the key topics at the 2024 World Economic Forum Annual Meeting in Davos, Switzerland, with companies and brands from all over the world sharing innovations and thoughts of the future of the technology. The popularity of generative AI will impact companies like Verizon Communications (VZ), which controls the wireless networks which will transmit so much of this data.
Verizon Chairman and CEO Hans Vestberg joins Yahoo Finance's Brian Sozzi and Julie Hyman to discuss how Verizon will implement generative AI into its business, take measures to solidify customer retention, and more.
It's all part of Yahoo Finance's exclusive coverage from the World Economic Forum in Davos, Switzerland, where our team will speak to top decision-makers as well as preeminent leaders in business, finance, and politics about the world’s most pressing issues and priorities for the coming year.Watch this full episode of Yahoo Finance Live here.
JULIE HYMAN: Welcome back to "Yahoo Finance" and our coverage from the World Economic Forum in Davos. I'm Julie Hyman, this is Brian Sozzi. And a lot of the conversations we've been having both on and off camera have been centered around AI, governance of AI, all the cool stuff AI can do. I even talked to a couple of folks off camera who said that they have a new AI-powered device, a generative AI-powered device called the Rabbit, which brings up the new sort of iPhone of AI race, if you will.
Well, let's talk to somebody about all of this. Chairman and CEO of Verizon, Hans Vestberg, is joining us now. Thank you so much for being here, Hans.
HANS VESTBERG: Thank you for having me. Good to be here. Great to be here.
JULIE HYMAN: So, when I think about AI-powered devices, obviously they need to run on something.
HANS VESTBERG: Absolutely.
JULIE HYMAN: So that makes me think of Verizon. So how are you thinking about what comes next and how Verizon plays in it?
HANS VESTBERG: So when it comes to AI, I mean, especially the generative AI and things like that, I think at the edge of the network is going to be very important to have AI to take quick decisions, very close to the end user, the customer, or the enterprise. And of course, that's how we build our network.
We built our network with an enormously strong resilience from the data center to the edge of the network. So I think that as you're going to see over time, the network will be very important. I mean, all the power you need for it, of course, to do all the generation of it, but also to transport all the data. And that's how we build the network.
So very clearly, we think that generative AI will be important for our business. Then, of course, we use AI already today in our company. And think that's going to continue to be an important tool for us.
BRIAN SOZZI: As this AI permeates the United States, does that change how much you invest each year in terms of CapEx?
HANS VESTBERG: No, no, not directly, but of course, over time, the smarter you become to know where you're going to deploy your capital-- now we talk about network capital, how you build your network. I mean, in 2023, we have the guidance between $18 billion and 1/4 to $19 billion and 1/4. So we invest quite heavily, a capital intensive business.
So if we would know a little bit better where we have the holes we need to put in capacity into quicker, that will be helpful from AI. Ultimately, I have a person doing it, but learning where do I have the challenges, where do I have problems, that's very important. So definitely, it can make us much more efficient.
JULIE HYMAN: When you look at your business-- I assume you guys are sort of device agnostic for end users on wireless devices. But I know you guys are trying to minimize churn at this point, you're trying to keep your wireless subscribers. Talk to us-- I know you can't give us a lot of near-term discussion, but give us some big picture around strategy.
HANS VESTBERG: No, because I'm going to report my fourth quarter next week.
JULIE HYMAN: I know, I know
HANS VESTBERG: So I will try to refrain from that. No, I think you come to a market-- if we talk wireless consumer, almost everyone in this country has a mobile phone. So it's much about retention of the customers, continue to give them great services, and building new services. I mean, we have not only the greatest network, we also built a lot of new services, especially with the content providers we have.
Right now, in the market, we have a combination of Netflix and Max. Nobody else can do that. And ultimately, to give the right services and the right type of products.
And we also launched-- my plan in May, where it's basically you customize your own plan. This is the type of network I want. This is the type of perks-- we call it perks. What type I want Disney Plus, I want that. And you can put it together, and that becomes a more attractive offering. So that's how we need to think about it.
Then, of course, it's also new customers that you want to attract. But as a smaller piece today, it's much more important to see that you have the right offering for the existing customers.
BRIAN SOZZI: The more tech CEOs that I talk to, I get the sense that I'm going to need a new phone very quickly. Do you see a major iPhone, Samsung upgrade cycle in the next couple of years because of this AI?
HANS VESTBERG: We have seen, of course, a little bit of a slowdown on customers getting new phones. So they keep the phones longer, because they're getting better and better. Of course, that's part of it. And the networks, of course, even better.
So but of course, every new innovation attracts new players in the market and new devices. And I think the last time, they were really hyped was, of course, when the first 5G phone came in 2019, '20, and '21. Let's see if AI have the same attraction.
You're going to need to see, first of all, that it gives some new application services for the consumer, especially if they're going to attract them. So we are eager to see-- I probably know more than I can say, but it's going to be exciting to see what type of phones will come out in the next couple of years.
JULIE HYMAN: Well, you're kind of on a related note, I mean, we heard one of your European competitors, Vodafone, coming out with a new partnership with Microsoft today that has to do with AI. Can we expect some things like that from Verizon?
HANS VESTBERG: I think we're already working with these type of things. And I think that both-- because what you need to think about when you deliver a service to customers, you need a network to be configured right, you need a devices and the modems that is making the connections right, and you need the applications.
We are long term. We work with our partners all the time to see that we have the best performance and the best innovative service on top of it. So you can not only expect, we're already working with all these players in order to see that customers get the best of us. And there's many different partners you need to work with because we are agnostic for different type of operating system and devices.
BRIAN SOZZI: We've talked to a lot of leaders so far in the two days we've been here. And especially, after the Iowa caucus results, there's now this new level of caution after these results. Of course, President Trump winning that Iowa caucus. Are you preparing for consumer weakening in the back half of the year as we get up to the election?
HANS VESTBERG: I mean, the last couple of years, basically we're preparing for a weakness. I think companies like ours are always prepared for different scenarios in the market. That's our job.
We haven't seen so much until the third quarter. At least, I can't say anything more. The consumer spend has been good. More important, I think, that our service, mobility and broadband, is so important in today's society in order for you to be part of our society. If it's during the education, work from home, or maybe even health care or other societal things are important.
So our industry has been growing in importance for the consumer and for enterprises. And I think that's part of it as well. But let us see, we are preparing for any outcome. But until the third quarter, which I reported last time, we didn't see much of it nor in customers payment readiness and things like that. So, but let's see next week, because next week, I'm going to have an earnings call.