The Reality Check: How Close is AI to Human Intelligence?
Here I am again, writing an article on AI. If you thought I had already given up on this topic, then I have to tell you the truth - no, on the contrary. But to the point. Can you remember the discussions 2 years ago? The range extended from "AI is interesting" to "AI will take over the world"! But let's take a step back and look at what's really happening in the world of artificial intelligence.
You know me - I like to analyze things, especially when it comes to technology that's reshaping our professional lives. Today, I want to share my thoughts on a question that keeps popping up in my conversations with procurement professionals and business leaders: How close are we really to achieving human-level artificial intelligence?
Understanding the Current AI Landscape
The news is filled with announcements from OpenAI's o1, Google's Gemini, and Anthropic's Claude, each claiming to bring us closer to artificial general intelligence (AGI). As someone working to a certain extent with AI in procurement processes, I want to share what I'm actually seeing in the field, rather than just repeating what we read in the headlines and slogans.
Let me share a recent experience that perfectly illustrates where we stand. I have been working on some AI Assistants for procurement for some time now. For example, Claude 3.5 has shown very good results in analyzing offers. Some things still need to be adjusted in the instructions, but the initial results are very promising. And I can say with a very clear conscience and very well-founded that you can save at least hours, if not days, with this AI Assistant. That is enormous!
But here's the catch - and this is where it gets interesting. When we needed to make strategic decisions about long-term supplier relationships or to enter into complex negotiations, the AI's limitations became visible. Let me explain why.
The Reality of AI Capabilities: A Practical Assessment
When it comes to procurement, I've seen AI perform incredibly well in certain areas. For instance, in document creation, analysis, comparisons, summarizing etc… These actions can reduce processing time from hours, days to just minutes or evens seconds. This isn't just about speed - it's about freeing up our procurement professionals to focus on what they do best: building relationships and making strategic decisions.
However, the same AI system that supports e.g. contract creation will struggle when we face a complex negotiation scenario with a key supplier. While it could analyze historical data and suggest cost strategies and targets, it couldn't grasp the nuanced dynamics of the relationship or understand the supplier's unstated concerns during the negotiation process.
The Gap Between Current AI and AGI
The path to AGI isn't in my opinion as straightforward as some might think. Let me share three real-world scenarios that highlight this gap.
First, consider a situation where we needed to renegotiate terms with a long-standing supplier during a market crisis. Our AI tools provided excellent data analysis and market insights, but they couldn't understand why maintaining this relationship, despite short-term cost increases, was crucial for our long-term innovation strategy. This type of contextual understanding remains uniquely human.
Second, during sourcing processes for specialized components, AI system could suggest conventional approaches based on historical data. However, it is difficult to create AI-supported models that take current and upcoming market news into account. This kind of creative problem-solving still eludes even the most advanced AI systems.
Third, in a critical supplier negotiation, while AI tools prepared perfect data-driven arguments, they cannot read the subtle emotional cues that ultimately lead to a breakthrough in the discussions. This emotional intelligence remains a distinctly human capability.
Implications for Businesses
So what does this mean for organizations, especially in procurement? Based on my experience, the key lies in creating synergies between AI capabilities and human expertise. The AI handles data analysis, contract review, and initial supplier screening, while teams focus on relationship building, final negotiations, and strategic decisions. This approach can transform procurement function, increasing efficiency while maintaining the quality of supplier relationships.
Looking Ahead
The journey toward more advanced AI capabilities reminds me of learning to ride a bike - you don't start with the Tour de France; you begin with training wheels. Similarly, organizations should focus on mastering current AI capabilities before dreaming about AGI. Start with specific processes where AI can add immediate value, develop clear frameworks for human-AI collaboration, and build systems that can evolve with technology.