Artificial intelligence has been deeply woven into the technology infrastructure at Papa John’s for about half a decade, ranging from fraud detection to AI-enabled algorithms that share with customers when their pizzas will be delivered to their homes. 

But what has changed at the restaurant chain is the frequency in which AI-enabled projects arise. And while there’s been an acceleration in the allure of AI, not every idea is worth investing in.

“For a company the size of Papa John’s, it’s not prudent to spend lots and lots of money” on AI, says Papa John’s chief technology officer, Justin Falciola. 

All six tech executives Fortune interviewed for this story said their organizations intend to spend more on AI in 2024. Chief technology and chief information officers play a key role in evaluating the use cases for AI, often presented by the tech team itself or other business managers across the organization, and determining which efforts should be prioritized. And with generative AI projected to add as much as $4.4 trillion in value annually, the sky feels like the limit to the transformative power of AI. 

Papa John’s is exploring AI in a few ways, including AI-enabled robotics and voice automation for customer calls; the latter has reached more than 100 locations in testing. The bots were good at handling repeat orders, but less successful at figuring out the balance of offering discounts to help lock in a sale. If the discounts get too generous, Papa John’s would see a great conversion rate but profits would suffer.

“We’re trying to get the kind of cost, customer experience, and order level profit equation right before we expand,” says Falciola.

Graphic design platform Canva started to see more visual manifestations of AI about four years ago. It acquired Kaleido, which created an AI-based background removal tool for images, and has served as the backbone of the integration of more AI features that Canva has developed. Other AI-enabled tools that Canva has launched include a text-to-image writing assistant and image generating apps. 

“We see 2024 has been a huge year for increasing productivity, getting people comfortable interacting with it, and finding the real use cases that they can use AI for no matter what they’re doing,” says Cameron Adams, Canva’s cofounder and chief product officer. 

As he looks ahead, Adams says AI remains in an exploratory phase where people still need to figure out how they can interact with the technology and expose themselves to the power of it. Humans, he believes, will serve a key role in sharing input for creative projects and guide the final assets, even if AI helps move things along at a faster speed. 

“We view AI as a creative partner, and that’s how we frame the experience that we’re giving people,” says Adams. “It’s not something that goes from zero and creates the final product.”

Real estate service firm Cushman & Wakefield says AI is a component of the company’s digital transformation journey that started in 2017. That’s manifested in advances like AI+, which Cushman & Wakefield unveiled in November, to embed AI across the commercial real estate transaction lifecycle.

Following the generative-AI boom, employee interest in AI became broader than other tech advancements. In response, Cushman & Wakefield formulated a “holistic strategy on how we wanted to level up our existing digital transformation and incorporate AI at every intersection of the digital workflow within commercial real estate,” says CIO Sal Companieh.

An AI task force helped educate Cushman & Wakefield’s workforce and ensures that AI is deployed responsibly. Meanwhile, a global emerging technology hub is a trusted internal resource that helps evaluate each AI use case, the intersection of responsible and secure AI, and put each product through a vendor risk assessment. 

“We’re not impeding the transition, but we’re just there to put the guardrails and partnerships to make sure that from a scalability point, the platforms they were evaluating are genuinely enterprise-grade and scalable and from a security perspective, making sure that they’re protecting our colleague and client data at all times,” says Companieh.

When presented with new AI use cases from business leaders across the organization—ranging from HR to legal to communications—CTOs and CIOs say it is best for technology leaders to be looped into conversations as early as possible.

“Day one is really when we like to be involved,” says Morningstar CTO James Rhodes. “I like to recommend that you don’t bring just one idea as to where you want to leverage the technology. Bring a few and then let’s have a discussion.”

The financial services company says it is often asked if AI will be a friend or foe to financial advisors. AI is already being used today by human advisors to automate certain tasks and for data collection. Morningstar anticipates more AI tools will be deployed in the years to come because there is so much value with the technology, and efficiency gains can help advisors spend more time with their clients. 

In May, Morningstar launched Mo, an AI chatbot that pairs the company’s investment research library with Microsoft’s Azure OpenAI service to summarize insights to investors. 

“It’s more like a research assistant that can help our clients better navigate the content and data that we produce, in a reliable and trustworthy way,” says Rhodes.

Consulting firm McKinsey says CTOs can look at AI to accelerate the reduction of technical debt, which can account for 20% to 40% of technology budgets. What could that look like? Take the example of a legacy application that needs to be rewritten with modern code. Even if 25% of that code was written by generative AI, it would help reduce the effort and cost of that technical debt.

“This is a lever to kind of increase the speed at which technical debt is paid off and move to more modern architectures and modern applications,” says ServiceNow CIO Chris Bedi.

ServiceNow says it is working to become an “AI-first company,” and to do that, it is equipping the software firm’s workforce to embrace AI. Every department has been mandated to have an AI strategy for 2024. And the company has already deployed well over a dozen generative-AI use cases internally. 

Prioritization is a challenge, says Chris Bedi, but “as a business leader, you’ve got to rely on how you’ve been prioritizing things for years. What is most important to the company right now?” Looking forward, he says ServiceNow will remain bullish on AI because every investment it has made in generative AI has had a material return.

“It absolutely makes sense to shift dollars here, because we are going to get a higher return rate,” says Chris Bedi.

“We have a ton of use cases and a ton of ideas that we’re investing in,” says Snowflake CIO Sunny Bedi. “But if you think of the overall narrative, it’s actually productivity.”

Take the example of customer contracts. Snowflake has over 8,000 customers and each one has their own custom contract, which can start with 40 pages but become as large as 400 pages as the relationship progresses. Snowflake is currently testing an AI solution it hopes to bring to the market this year called Document AI, which leverages large language models that would help customers extract the content they need from the dense pile of documents that contain a lot of unique data. 

Sunny Bedi says that while Snowflake does intend to continue to invest more in AI in the years to come, it has to be more prudent than larger tech giants that have bigger budgets. The greatest priorities are on use cases like Document AI, which intersects Snowflake’s ongoing product strategy with a tech problem that the company says hasn’t been solved yet. 

“We’re trying to prioritize what makes sense and how that actually intersects with our product offerings,” says Sunny Bedi. “We’ve been very deliberate about deprioritizing things where we don’t see the real value or the [return on investment] is not well defined.”

This story was originally featured on Fortune.com

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After a yearslong downturn that left U.S. offices empty, Blackstone Inc. President Jon Gray sees the sector as ripe for new bets. His real estate dealmakers are preparing to scoop up a stake in a 50-story building in Midtown Manhattan, the strongest signal yet that it sees the market primed for a rebound.

Executives running the firm’s commercial mortgage trust, meanwhile, are still sorting through old office loans gone bad. Blackstone Mortgage Trust Inc. untangled more than $1 billion of soured debt, mostly tied to offices, in the final quarter of last year. 

And the REIT — known by its ticker, BXMT — still has more than $1 billion of troubled loans in its roughly $17 billion book. It’s a reminder that the real estate recovery is uneven and halting.

“We’ll certainly see less office in the portfolio as we move forward here,” BXMT Chief Executive Officer Katie Keenan, a 13-year Blackstone veteran, told analysts last month. The trust had just posted its first full-year net loss since Blackstone took it over in 2012. Much of the loss came from recognizing that BXMT couldn’t collect some loans in full.

BXMT shares finished last year down some 50% from their pandemic peak, lopping off about $2 billion in market value before rebounding in February. It’s just a small part of the wider firm that manages $1.1 trillion, but the lender’s health is intertwined with parts of Blackstone. A handful of borrowers — such as Australian gaming company Crown Resorts — are managed by the world’s largest commercial real estate owner.

Blackstone has emphasized that offices are less than 2% of its US real estate equity portfolio. BXMT, on the other hand, was filled with office loans — more than 50% of its portfolio — at the very start of the Covid-19 pandemic. Through write-offs, repayments and taking the keys to buildings, it has shrunk that share to about a third. More than half of BXMT’s US office loans are watchlisted or impaired.

“The office loan exposure was the big overhang on their stock for about two years,” Harsh Hemnani, a senior analyst at real estate research firm Green Street, said of BXMT. “Now we’re seeing that resolving itself, but also certain things will take time to play out.”

Short sellers such as Carson Block warned the REIT would get swept up in the commercial property meltdown. Block disclosed a bet against BXMT in late 2023, and the trust slashed its dividend less than a year later. Block didn’t respond to a request for comment on the status of his short position, though he told Bloomberg Television this week his firm is “happy” its thesis played out. Still, Block said he’s less sure about the short case for commercial real estate going forward given uncertainty around rates. Short positions in BXMT have halved to about 8.4% of outstanding shares over the past year or so, according to data compiled by S&P Global.

BXMT says its fortunes are lifting as a real estate recovery gathers momentum. 

“One year ago, we said that real estate values were bottoming and that’s exactly what has happened,” BXMT said in an emailed statement. The trust is moving aggressively to deploy near-record liquidity into new loans, and office loans are throwing off cash, according to the statement. More than half of repayments in roughly the past year have come from office loans.

Still, investors have little appetite for all but the best offices. The trust is working to sell a collateralized loan obligation — essentially a bond made up of loans it has originated — for the first time since 2021. The deal will be backed mostly by apartment complexes, hospitality and industrial properties, a shift from prior CLOs linked mostly to office buildings. 

Blackstone’s real estate team was bullish on office landlords in major metropolitan areas a decade ago, according to people familiar with the matter. CEO Steve Schwarzman told associates the buildings could still be profitable even if they were only half occupied, another person said.

But few predicted the upheaval that the Covid-19 pandemic would bring. Values have fallen by more than 75% on average from the peak for most buildings in New York, according to Stijn Van Nieuwerburgh, a professor at Columbia University’s Graduate School of Business.

And BXMT carried much greater global office exposure than peers. While the Blackstone unit had more than half its portfolio tied to office loans at the start of the pandemic, similar arms at Apollo Global Management Inc. and KKR & Co. reported concentrations below 30%. 

Analysts have questioned whether the trust needs to reserve more for potential credit losses. BXMT set aside about $734 million to account for near-term credit losses at the end of 2024, according to company filings. That’s up from $125 million at the end of 2021.

Hemnani, the Green Street analyst, said the trust’s loan loss reserves still aren’t big enough. 

“We still think their CECL reserves are not fully accounting for the losses that they might experience,” he said, referring to the accounting term for near-term loan losses. “But the gap between the losses we’re expecting and their reserves is narrowing very quickly.”

In a statement, the trust said it has taken a prudent approach to its reserves that has been “validated by the fact that our resolutions have overall been more favorable than implied by our loss reserves.” 

It resolved $1.6 billion of impaired loans in 2024 above carrying values.

Queens Warehouse

BXMT has been working to clean up less-than-pristine deals as the office market slowly recovers. In New York, for example, Blackstone put additional capital into the Falchi Building, which has a $200 million loan with BXMT that wasn’t repaid upon maturity, according to people familiar with the matter. Located in an industrial part of Queens near a recycling plant and construction suppliers, the warehouse-turned-office leases space to Uber and New York City’s taxi commission. 

BXMT also resorted to some financial engineering to buy borrowers time. In the past year, the trust has agreed to let certain borrowers delay cash payments in exchange for higher interest and more fees. Some of the modifications include payment in kind, which means interest payments are delayed and instead added on to the principal due. Such maneuvers are rarely a good sign for a borrower. Still, these represented a small fraction of BXMT’s interest income — only 1% by one measure — last year, the trust said. 

The trust has received more financial wiggle room itself. Last year, to avoid violating a covenant on BXMT’s own borrowings, executives persuaded banks to loosen restrictions on the debt. It said the agreement is “generally standard” among its peers. 

Blackstone’s broader real estate lending unit, helmed by 14-year firm veteran Tim Johnson, has been through some personnel changes. Mike Nash — who co-founded the real estate debt business and was known for composure during complex workouts — moved to the firm’s hedge fund arm in 2021 and recently retired, though he remains on BXMT’s board. Jonathan Pollack, Blackstone’s former head of real estate credit, left last year to become Starwood Capital Group’s president.

In a call with analysts last month, BXMT painted a picture of an enterprise firmly in rebound mode. But there’s more to do before the unit can fully take advantage of the more attractive rates boosting other corners of the credit market. It’s still seeing some losers trickle in: executives referenced one new impairment, an unnamed UK office loan. The building represents less than 1% of its portfolio and sits in a “strong submarket of London,” the trust said. 

Investors appear sanguine. In the days after its most recent earnings release, traders bid up the stock some 5%. It’s up 17% year-to-date, outperforming peers.

And BXMT executives aren’t swearing off offices for good. They just saw their marquee deal — a 2018-era, $1.8 billion loan for a Manhattan skyscraper called The Spiral — repaid in full.  

“If we could do more deals like The Spiral, we absolutely would,” Keenan, the CEO, said during the earnings call. But in a quarter in which BXMT invested and pledged more than $2 billion in originations, she warned the firm will tread carefully. “The aperture of the type of office opportunities and where we see outperformance is quite narrow, and we’re going to be extremely selective.”

This story was originally featured on Fortune.com

Elon Musk’s Department of Government Efficiency now has 10 staffers at the Social Security Administration as the Trump White House looks for evidence to support its claim that there could be millions of dead people receiving public benefits. 

Two sworn statements filed in federal court late Wednesday show that the SSA has staffed up in recent weeks to include four special government employees and six more DOGE staffers on loan from other departments.

Their mission: detecting waste, fraud and abuse in the nation’s 90-year-old social insurance agency.

Musk has called Social Security a “Ponzi scheme,” and suggested this week that there could be as much as $700 billion a year in entitlement fraud. Critics have said he is setting up a move to cut the popular program. Others are concerned about Musk’s team having access to Americans’ most sensitive data.

From 2015 through 2022, Social Security estimated that it made almost $72 billion in improper payments — less than 1% of benefits paid, according to an inspector general report last year. Not all of that amount was because of fraud, however, and all but $23 billion was able to be recovered.

At least seven DOGE staffers have been granted access to a database known as the Master File of Social Security Number Holders and SSN Applications, also known as Numident. They currently have read-only access as they try to connect the dots between Social Security numbers and possible fraudulent benefits.

That database is often missing dates of death, a fact that President Donald Trump and Musk, his billionaire adviser, have used as the basis of claims that more than 20 million people over 100 are still on the Social Security rolls. 

“And money is being paid to many of them, and we’re searching right now,” Trump said in a speech to Congress last week. 

Leland Dudek, an anti-fraud expert who Trump promoted to acting Social Security Commissioner last month after Dudek was suspended for cooperating with DOGE, has pushed back on those claims. 

Just because a date of death is missing from Numident doesn’t mean payments are being made, Dudek said in a statement. Those are managed in a separate database, the Master Beneficiary Record.

“We are steadfast in our commitment to root out fraud, waste, and abuse in our programs, and actively correcting the inconsistencies with missing dates of death,” he said. 

Death Data

Indeed, at least six DOGE staffers at the agency are working with death data. The Social Security Administration maintains a Master Death File of more than 94 million reported deaths collected from state records and funeral directors.

Other databases being used in the hunt are the Supplemental Security Record, which contains data on disability benefits and Treasury Department payment files. The benefits databases can also contain limited taxpayer information used to calculate eligibility for benefits.  

DOGE has access to copies of the databases, limiting the ability to make changes, the agency’s chief technology officer, Michael Russo, said in a sworn statement. There are safeguards to ensure there are no private servers connected to SSA data, he said. 

Russo’s statement was included in a court filing late Wednesday in a lawsuit brought by the American Federation of State County and Municipal Employees. The public employees union filed suit against DOGE and the Maryland-based Social Security Administration, trying to block what it calls an “unprecedented data grab.”

“The overall goal of the work performed by SSA’s DOGE Team is to detect fraud, waste and abuse in SSA programs,” Russo said. “This level of access ensures these employees can review records needed to detect fraud but does not allow them the ability to make any changes to beneficiary data or payment files.”

Neither Russo nor Deputy Commissioner Florence Felix-Lawson, who filed a separate sworn statement, would identify the DOGE staffers by name, “to avoid exposing them to threats and harassment.”

But special government employees and DOGE detailees at the agency include former Tesla board member Antonio Gracias of Valor Equity Partners; Scott Coulter, formerly of Lone Pine Capital; and Marko Elez, re-hired by DOGE and sent to Social Security after resigning from the Treasury Department over reports of racist social media posts. 

The Social Security Administration has emerged as a key outpost for DOGE, because it administers $1.6 trillion in annual benefits but also because of its unique position to access a wide range of government data. Indeed, DOGE’s hunt for fraud in Social Security is also radiating out into other federal agencies.

Two DOGE team members also have access to the National Directory of New Hires, a database kept by the Heath and Human Services Departments’ Office of Child Support Services to help states enforce child support orders.

And one Social Security DOGE team member will soon be dispatched to the Small Business Administration. 

The court filing also shows how DOGE team members can move around from agency to agency. Six Social Security DOGE staffers are on loan from other agencies, including the National Aeronautical and Space Administration, Office of Personnel Management, Labor Department and General Services Administration. 

And one comes from the US DOGE Service, the White House agency created by Trump’s Inauguration Day executive order creating the cost-cutting initiative.

This story was originally featured on Fortune.com