I would single out the advent of the so-called Industrial Revolution 4.0—encompassing new technologies such as Artificial Intelligence (AI), Robotics, the Internet of Things (IoT), and Data Analytics—as the cause of Complexity (the C in VUCA) in the global, regional, and local environments faced by business. Despite the Philippines being the least digitalized among our Indo-Pacific peers, AI is already reshaping how business is conducted here today, even within the SME sector.

There is significant talk about a looming AI bubble that could negatively impact Philippine businesses, big or small. The situation draws comparisons to the dot-com bubble of the late 1990s and the beginning of the new millennium. Already, what transpired on Wall Street last Nov. 7, 2025, serves as a harbinger of a possible AI bubble. US tech groups closely tied to the AI boom lost more than $1 trillion in market value, setting Wall Street on course for its worst week since Donald Trump’s "liberation day" tariffs in April 2025. The market value of eight of the most valuable AI-related stocks—including Nvidia, Meta, Palantir, and Oracle—had fallen by $1.2 trillion. These declines left the tech-heavy Nasdaq headed for a weekly loss of 4.6 percent, its worst five-day run since the Index fell 10 percent after Trump launched his trade war.

In a very insightful article, my fellow BW columnist Reynaldo C. Lugtu explained the circumstances that may lead to an AI bubble in the Philippines. In the article entitled “The Coming AI Bubble,” he gave a fair warning to business firms about not being carried away by AI's promises. In his words:

“Companies chase AI for the sake of saying they use AI. They buy systems that they don’t need. They replace workflows even when the old ones remain more reliable. Others bet their entire strategy on something no one has tested in real-world conditions. In the dot-com era, firms poured millions into fancy websites that delivered no results. They wanted to look modern. Today’s version is signing up for expensive AI tools and hoping they magically improve productivity without real planning.”

On the consumer side, Lugtu admits that AI can offer conveniences and benefits never before experienced. AI can write documents, give advice, help students study, and even suggest what to buy. From my own personal experience, because of the instant manner with which ChatGPT can make available data and information that I already know from previous reading and research, writing a column takes half as much time today compared to the time before I had access to this AI tool. There is no danger that I will be victimized by false information or invented data because I only accept what I already know to be true. AI simply facilitates my remembering information already stored in my brain—a very important service to aging people like me.

At a more comprehensive level, AI offers benefits like increased efficiency through automation, improved decision-making, enhanced innovation, and personalized experiences. On the liability side, it presents risks, including job displacement, ethical biases, privacy concerns, and a lack of human accountability.

AI automates repetitive and time-consuming tasks across industries (e.g., manufacturing, customer service, data entry, etc.), allowing human workers to focus on more complex, creative, and strategic activities.

AI systems can analyze vast amounts of data at high speeds to identify patterns and trends, providing valuable insights and helping organizations make better, more data-driven decisions with reduced human error.

Especially in healthcare, with a focus on the health of senior citizens, AI technology can lead to faster and more accurate diagnostics, personalized treatment plans, drug discovery, and robotic surgery assistance, all of which can lead to better patient outcomes and lower costs.

AI is also being used to help mitigate climate change, optimize energy consumption, improve agricultural yields, and strengthen cybersecurity defenses against threats. Furthermore, AI can operate in hazardous environments (e.g., space, deep sea, bomb disposal) and monitor workplace safety, reducing risks and injuries for humans. AI algorithms tailor experiences to individual preferences, from educational content and entertainment recommendations to personalized financial advice and marketing campaigns.

There are, however, significant risks about which potential users of AI should be fully aware.

AI systems learn from the data used in their training. If these data contain historical or societal biases, the AI can perpetuate and even amplify these discriminatory outcomes in critical areas like hiring, loan approvals, or law enforcement.

There are also privacy and security concerns. AI requires access to large datasets, which raises important privacy concerns. Some data are vulnerable to breaches, unauthorized access, or misuse, which can have severe legal and reputational consequences.

Also, many advanced AI models operate as “black boxes,” meaning their decision-making processes are not easily understandable. This lack of transparency makes it difficult to assign responsibility when errors or harm occur.

For beginners, it may not be obvious that developing and implementing advanced AI systems can be very expensive, which may widen the gap between large corporations or developed nations that can afford the technology and smaller entities or developing nations that cannot.

At its worst, malicious actors and criminals could use AI for harmful purposes, such as creating convincing deepfakes for misinformation campaigns, automating sophisticated cyberattacks, or developing autonomous weapons systems with life-and-death decision-making capabilities.

AI can also destroy the reputations of honest and good people by creating very realistic-looking videos presenting these people in a bad light. Many Filipinos have been dismayed by the appearance of obviously false stories created by AI presenting our beloved Cardinal Luis Antonio Tagle in a bad light, especially as regards his relationships with the Supreme Pontiff, Pope Leo XIV. Another more recent example is the way the British Broadcasting Company (BBC) doctored reports on how President Trump reacted to his defeat to President Biden in the U.S. Presidential elections last January 2022. These are among the worst uses of AI.

Given all these complex issues involving the potential benefits and harm of AI to the business world, it is incumbent on every business leader (entrepreneur, executive, manager) to practice what they preach to their employees: that they must constantly upskill, reskill, and retool themselves through short courses or training programs. No matter how forbidding AI may sound, especially to managers and executives who consider themselves weak in mathematics or quantitative analysis, there is no way one can run a modern enterprise—whether large, medium, or small—without having a minimum understanding of the various uses of AI in the business world.

There are a myriad of short training programs offered by universities, consulting firms, and technical training institutes, some lasting for a few hours or days (similar to the ubiquitous seminars on corporate governance which are obligatory for board directors of listed companies). For example, last April 2025, I accompanied a group of some 30 top executives from the Philippines to travel to Barcelona, Spain, to take a three-day training seminar on AI at the famous IESE Business School, one of the top business schools in the world today, whose leadership is especially strong in the area of customized executive education programs. Not only did the Filipino executives learn some important uses of AI in their respective industries, but they also obtained some very valuable guidelines on how to supervise the use of AI and other digital tools by their children so that they don't end up like the 14-year-old boy in Florida, USA, who committed suicide under the instigation of AI.