- Skogstad’s advice to other auto industry leaders is to iterate fast and don’t be afraid to fail.
- The potential for gen AI across many different sectors is clear, with an expected annual impact of around $6 trillion to $8 trillion.
- Mercedes CEO says that the data stays within Mercedes, with you and your car and none of it is shared back with OpenAI or ChatGPT.
Gen AI has been front and centre since the launch of ChatGPT in November 2022, although the technology already existed for many years.
Gen AI burst into our lives earlier this year with ChatGPT. Whether you played with a toast or a roast or planned your vacation using this powerful technology, it had been around for the past six or seven years.
It started in December 2017 with a transformer model, the “T” in GPT, coming from Google, and has evolved since then.
Over the last few months, there’s been a lot of debate about how gen AI will impact different industries, our way of working, and our way of life.
Mercedes-Benz is the first automotive manufacturer to integrate ChatGPT in their vehicles, which is currently being beta-tested with 900,000 users.
How did the idea come?
Philipp Skogstad, CEO of Mercedes-Benz R&D North America, said in a podcast to McKinsey & Company that “we’ve always been a leader, and we continue to carry that tradition forward.”
“ChatGPT’s latest version came out at the end of last year, and it was already installed in my car just after the New Year, in time to demonstrate it at CES [the Consumer Electronics Show] in January, where it met the approval of the chief technology officer for all of Mercedes.”
In February, they showed it to influencers, analysts, and media from around the world, and the feedback was very, very positive.
“That encouraged us to bring this technology to our customers. And we wouldn’t be Mercedes if we didn’t do it quickly but also responsibly. We’re very glad our culture enabled us to be the first by iterating early on, installing it in my car, and then rolling it out in a beta program,” Skogstad said.
US customers opted in either via their Mercedes app or from their car, where they can just say, “Hey Mercedes, I wanted to join the ChatGPT beta program.”
At that point, Hey Mercedes voice assistant will continue to deliver all your navigation and vehicle control functions you’re used to but draw on a broader domain via ChatGPT technology.
Customer in mind
“We have united but divergent pieces of software and hardware and need to make sure the two always connect, which is a key part of my responsibility. And in this case, it was a bootstrapped effort involving many teams,” Skogstad said.
However, he said that enabling the beta program required changes in the app, as well as bringing in legal and data security colleagues.
As this effort evolved, Mercedes kept iterating and keeping the customer in mind.
“There was always this very clear focus, and I thought, we have a great feature. We’ve seen it work in my car. Let’s have as many customers as possible benefit from this as quickly as possible.” We launched in the US, but we’re not going to stop here,” Skogstad said.
“I sometimes need to remind the team that even though we have something really good, we should keep iterating to make it better. For those of us familiar with software, especially cloud software, that’s the culture of having a fixed release cycle and a need to get something out there very quickly.”
But what’s important with all this, he said is to ensure that customers’ safety first and foremost—their physical safety as well as their digital safety.
Moreover, he said that handling customer data responsibly is key to ensuring the privacy of the customers throughout the entire process.
Transformational impact
Skogstad said that it will have an transformational impact on all parts of the work, personal lives, and “how we interact with each other and our cars. Right now, we’ve implemented ChatGPT through voice. We’re seeing more and more intelligent assistants all around us in our lives, and we want the car to be part of that.”
According to McKinsey, the potential for gen AI across many different sectors is clear, with an expected annual impact of around $6 trillion to $8 trillion.
But McKinsey mentioned in a recent article that 75 per cent of the value of gen AI in specific use cases falls under four major areas: customer operations, marketing and sales, software engineering and R&D.
Ben Ellencweig, senior partner and global leader of QuantumBlack, AI by McKinsey, said that the industry is moving at a laser-speed pace and it’s just going faster and faster but “we have to remember this is early days of the first innings.”
“We’re all going to have virtual assistants writing memos and preparing us for meetings. They’re also going to be composing music, whether it’s a new song by the Beatles or anything else.”
But what’s interesting, he said is to look at the holistic ecosystem beyond the consumer and think about the technician that services your car when you bring it to the dealer.
Gen AI can guide the technician, to identify the problem and quickly pinpoint how to solve that problem, he said.
Driving change
“I think humans will always need to stay in the loop, and human intelligence will always be a key,” Skogstad said.
AI is a key enabler, he said and added that there is a transformation underway, and all of us like to drive change.
“People want to drive change, but they don’t want to be changed. So the key here is to let people drive this transformation and to give them access to generative AI so they can play with it themselves.”
Mercedes has been enabling developers to use sandbox environments so their data stays within the company.
“We want them to try out the technology in a safe way and iterate their way forward like we did when we introduced ChatGPT to our cars. I think then we’ll be able to automate a lot of the tedious tasks currently preventing us from doing more value-added activities,” he said.
Regarding safety, he said that safety is absolutely a key for Mercedes and a cornerstone of their reputation.
“Whether you are talking about physical or digital safety, both need to be treated with the utmost importance. So if you look at how we use ChatGPT, the data stays within Mercedes, with you and your car. It’s in our Microsoft cloud, which your other vehicle data isn’t. But everything is exactly disclosed in terms of what goes where in our permissions.”
None of it is shared back with OpenAI or ChatGPT, so it cannot be used to train it for future answers, he said to avoid data leakage.
“The same holds for our internal projects. We’re using the same rules for our data as we do for our customer data to make sure it doesn’t escape.”
Gen AI needs proper training
Ellencweig said that this is a new technology and a whole new paradigm.
“We’re still learning it as a society, as enterprises, and in the automotive ecosystem. We like to talk about responsible AI, but generative AI is not perfect. You’ve probably all heard of gen AI hallucinations, which is when ChatGPT completely fabricates information. The models are so sophisticated and the answers are presented in such a profound way that you take it as a solid fact or a truth.
But many times, he said the large language model, on which gen AI chatbots like ChatGPT are based, is just wrong.
Maybe it wasn’t trained properly, or you’re asking something relatively new the model is still learning, he said but there’s also a question of how you train the model, and “we’ve seen issues with biases based on the training material used for the model.”
In terms of ethical use, he said let’s not forget that at the end of the day, underlying the models is a whole host of structured and unstructured data that you need to think about how to manage.
And obviously, “we’re connecting our system to other organisations in the outside world, which also poses a risk. We’re seeing two approaches, with some organisations blocking access to gen AI completely, while others are enabling it out in the open.”
In terms of responsible use of AI, “I would make two points. One, establish clear guidelines for your customers and employees, and be responsible, especially when it comes to what we like to call explainability.
“Point number two is providing clear disclaimers, explaining that this is all based solely on public knowledge plus some private, enterprise knowledge, which has a huge impact on the level of accuracy or confidence in a given answer.”
Rapid iteration
Responsible use of AI includes legal and ethical implications, and “we must realise we’re still learning how to use this phenomenal technology that will disrupt every aspect of life. And sometimes, humans are not exactly fully accurate either, so it’s a journey,” Ellencweig said.
Mercedes’ long-term vision is to make the car part of a person’s digital and physical life.
“Mercedes stands for luxury and technology, and I think what that means will continue to evolve. Installing ChatGPT in the car is one step, very iteratively done, and will continue to evolve from there over many, many increments.”
Skogstad’s advice to other auto industry leaders is to iterate fast and don’t be afraid to fail.
“You’re going to learn a whole lot more from failing than succeeding. And that’s the beauty of fast iteration since every failure is only a small failure, not a big one. That’s why I’m so fond of rapid iteration but be responsible. In each case, think through the worst-case scenario, and treat your customer data and safety responsibly.”
Moreover, Mercedes’s slogan is “the best or nothing.”