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Carnival Cruise Line CIO’s measured approach to navigating Gen AI

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Carnival Cruise Line has piloted over 100 different generative artificial intelligence projects. And while only six are in full production today, the cruise line operator’s chief information officer is pleased with the company’s measured progress.

“We have limited, for the time being, the number of tools that are available,” says Sean Kenny, who has served as CIO since 2017. “What we wanted to do was not have science experiments everywhere.” 

Kenny says that Carnival Cruise Line established an AI governing body that meets monthly to determine which use cases should get capital funding, track progress during the piloting phase, and sign off on when an application of generative AI is ready for broader adoption.

Carnival Cruise Line’s generative AI adoption strategy is independently operated from the company’s other brands, which includes Holland America and Costa Cruises. Each division has been empowered to individually navigate their technology roadmap.

In his role as CIO, Kenny says part of his job is to bring employees along the adoption journey, promoting training courses offered from AI providers like Microsoft and corporate hackathons. He says one-on-one coaching is more effective than group sessions.

“Nobody wants to look dumb, especially if your boss is sitting at the table with you,” says Kenny, of the hesitancy he’s observed in AI group training sessions. Carnival’s employees can also reach out to a centralized AI team to ask questions if they get stuck while trying to use these relatively new AI tools. 

One generative AI use case that Carnival has deployed is a tool that can help personal vacation planners, the company’s travel agents, answer guest questions. Another application of AI that Kenny is excited about is a tool helping servers make more appropriate recommendations for the perfect red wine to sip with steak. What Carnival hopes to see from the latter is an increase to the company’s net promoter score, a closely watched customer satisfaction metric that cruise lines, restaurants, retailers, and other consumer-focused companies track.

Kenny says he’s tapped the expertise of big tech giants like Google, Microsoft, and IBM for Carnival’s AI journey, but is also keeping a close eye on emerging players, especially in the cybersecurity arena. “We’re trying to be open minded to the startups,” he says. “I think it’s important for business and IT leaders to be open to the new players.”

While cruise line operators are enjoying a surge in popularity after the pandemic badly battered the industry—and Carnival itself reported an all-time high of $25 billion in annual revenue in 2024—investments in AI and other technologies could make travel by ship even more desirable.

Kenny says the technology will be especially powerful when it comes to personalization. A guest that books a Jamaican jerk chicken cooking excursion class may also be interested in a wine tasting on the boat. “In terms of the guest experience, it shows us trying to connect the dots,” says Kenny, who also cautions that Carnival doesn’t want to go overboard and be too pushy.

Kenny is closely monitoring other emerging technologies, including an ongoing test of a robotic tool that can comb through leftover food and remove foreign materials like plastic, glass, and wood. This allows Carnival to crush leftovers and pulverize it into literal fish food that can be dumped into the sea. Previously, this work was exclusively done by human hands.

Kenny is also excited about the prospect of using augmented reality and virtual reality technologies to improve training and to monitor and adjust the settings of the large diesel engines, which are so loud that they make in-person work extremely unpleasant. There aren’t any solutions available on the market that Carnival thinks are ready for adoption, but the company is keeping a close eye on progress from vendors.

What’s further along is the company’s WiFi capabilities. A decade ago, Kenny says most travelers expected that any hotel they’d check into would offer internet access, even if they had to pay extra for it, but that this expectation of connectivity wasn’t always true on a cruise ship. That’s been evolving and Kenny has mostly solved the issue by leveraging SpaceX’s Starlink and other providers to deliver far more steady internet access while at sea.

Better WiFi has allowed Carnival to upsell, giving travelers more access to an app where they can book excursions like snorkeling or visiting a historic cultural site when the boat lingers in a port. Excursions are an extra revenue boost for cruise operators like Carnival and AI-enabled travel recommendations, Kenny says, could make these journeys even more alluring.

“I don’t need my tool to go into the world wide web to pick out data and present it to you,” he says. “We can rely on our own terabytes of data.”

John Kell

Send thoughts or suggestions to CIO Intelligence here.

NEWS PACKETS

The AI PC market is rattled by tariffs. Demand for AI PCs in 2024 is expected to be softer than initially projected, as Gartner now says 78 million devices will be shipped this year, a more conservative estimate than the 114 million units the research firm had forecast last year, according to CIO Dive. Tariffs and slower economic growth have reportedly affected the adoption rate of AI PCs, though Gartner says that by 2029, these devices will be the norm among hardware providers including HP and Dell. Gartner says AI PCs will also impact the software landscape, with two in five software vendors investing in AI features that run directly on PCs by the end of 2026, up from merely 2% in 2024.

Anthropic’s new funding round nearly triples AI startup’s valuation. Bloomberg reports that Anthropic has closed on a deal to raise an additional $13 billion from investors, one of the largest ever for an AI company, at a valuation of $183 billion, up from the $61.5 billion valuation if fetched in March. The latest financing was led by investment firm Iconiq Capital, with other participants including Fidelity Management and Research Co., Lightspeed Venture Partners, and Qatar Investment Authority. Bloomberg says the total was higher than initially expected, due to strong investor demand. Anthropic, which was founded in 2021 by former employees of rival OpenAI, said that the latest funding round reflected the company’s “unprecedented velocity and reinforces our position as the leading intelligence platform for enterprises, developers, and power users.”

Nvidia’s monster 2Q comes with some concerns. Fortune reports that Nvidia’s quarterly results were “by far the biggest event of this earnings season,” as the AI chip maker posted second-quarter revenue and profits that bested Wall Street’s sky-high expectations. But some analysts have worried about a disclosure from Nvidia that 44% of revenue from chip sales to data centers is derived from just two customers, presumed to be Microsoft and Meta Platforms. There are also growing fears of more local competition from China where one rival, semiconductor firm Cambricon, reported revenue that surged 4,300% in the first half of the year. Nvidia CEO Jensen Huang touted the $50 billion AI market opportunity in China, but also warned that getting approval to sell the newest GPU chip will take time.

ADOPTION CURVE

AI coding tools proliferate, but over-reliance is a big worry. AI coding assistants like GitHub Copilot, Cursor, and Windsurf continue to see strong adoption among developers, with a recent survey finding that 78% of developers rely on these tools every day and two-thirds reporting that their organization’s use of AI coding will “increase significantly” over the next 12 months. The survey of 300 technology decision makers across North America, Europe, and Asia-Pacific, which was backed by Australian software maker Canva, also found that 95% of technologists were comfortable with candidates using AI during technical interviews.

The study did find some lingering concerns. One in three say over-reliance on AI without developer accountability was their top worry, while one in five were perturbed that junior engineers may see their development stunted. CIOs and CTOs generally have agreed that AI coding tools will dramatically change the workflows for developers to tilt in favor of editing more code rather than writing it. To that end, Canva’s survey found that 93% say AI-generated code is “always or often” reviewed. 

Courtesy of Canva

JOBS RADAR

Hiring:

– State Street is seeking a chief data and AI officer, based in Boston. Posted salary range: $300K-$412.5K/year.

– AbsenceSoft is seeking a chief technical officer, a remote-based role. Posted salary range: $275K-$390K/year.

– Chanel is seeking a head of technology, based in New York City. Posted salary range: $248.6K-$300K/year.

– Starburst is seeking a chief information security officer, a remote-based role. Posted salary range: $250K-$300K/year.

Hired:

– Lululemon (No. 401 on the Fortune 500) announced the appointment of Ranju Das as chief AI and technology officer, effective September 2, and also disclosed that CIO Julie Averill will depart the apparel maker to pursue other opportunities. Das will report to CEO Calvin McDonald and joins Lululemon after previously serving as CEO and founder of Seattle-based startup Swan AI Studios. He also served as CEO of OptumLabs, the research and development arm of UnitedHealth Group.

Every Friday morning, the weekly Fortune 500 Power Moves column tracks Fortune 500 companies C-suite shifts—see the most recent edition.

– Mandarin Oriental Hotel Group appointed Raphael Bick as CIO, joining the luxury hotel operator to oversee technology and AI. Bick joins from McKinsey, where he spent nearly 15 years in leadership roles, including most recently leading the consulting firm’s technology practice in Asia.

– Renault Group promoted Philippe Brunet to the role of CTO, overseeing engineering for both the French auto manufacturer and its electric vehicle arm Ampere. Brunet has worked at Renault for his entire career and has held a wide variety of leadership roles, including as SVP of powertrain engineering and as VP of software and tuning powertrain engineering.

– ArkeaBio announced the appointment of Zach Serber as CTO, joining the agricultural bioscience company to oversee the company’s scientific efforts to develop a vaccine to reduce methane emissions from cattle. Serber previously served as a founder and chief science officer at biotechnology company Zymergen and was chief operating officer at biotech startup Evozyne.

– Fetch has appointed Ori Schnaps as CTO, joining the mobile shopping rewards app to oversee product development and the application of AI to increase personalization. Schnaps most recently served as head of core product engineering at social media site Reddit. Before that, he held leadership roles at Meta and served as a co-founder of Thrive, a personal finance startup that was acquired in 2016.

– AI Proteins promoted James Bowman to serve as the biotech company’s first-ever CTO, where he will integrate machine learning, robotics, and large-scale data analysis to create novel protein therapeutics. Bowman previously served as director of protein engineering and initially joined AI Proteins in 2021. Prior to that, he was a postdoctoral fellow at the Institute for Protein Innovation, Boston Children’s Hospital and Harvard Medical School.

– Ardent Mills appointed Ryan Kelley as CIO, joining the flour-milling and ingredient company after most recently serving as CIO at oil-and-gas exploration and production company Par Pacific Holdings. Kelley also previously served as a CIO and chief procurement officer at oil refinery operator Motiva Enterprises. He also served as a director of supply chain management at energy company Andeavor.

– Amyris announced Sunil Chandran returned to the biotechnology company to serve as CTO following a two-year tenure as chief science officer at plant-based meats producer Impossible Foods. Chandran has spent 17 years at Amyris, rising up the ranks after initially joining as a scientist to eventually becoming head of research and development.



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Senate Dems’ plan to fix Obamacare premiums adds nearly $300 billion to deficit, CRFB says

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December 5, 2025

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The Committee for a Responsible Federal Budget (CRFB) is a nonpartisan watchdog that regularly estimates how much the U.S. Congress is adding to the $38 trillion national debt.

With enhanced Affordable Care Act (ACA) subsidies due to expire within days, some Senate Democrats are scrambling to protect millions of Americans from getting the unpleasant holiday gift of spiking health insurance premiums. The CRFB says there’s just one problem with the plan: It’s not funded.

“With the national debt as large as the economy and interest payments costing $1 trillion annually, it is absurd to suggest adding hundreds of billions more to the debt,” CRFB President Maya MacGuineas wrote in a statement on Friday afternoon.

The proposal, backed by members of the Senate Democratic caucus, would fully extend the enhanced ACA subsidies for three years, from 2026 through 2028, with no additional income limits on who can qualify. Those subsidies, originally boosted during the pandemic and later renewed, were designed to lower premiums and prevent coverage losses for middle‑ and lower‑income households purchasing insurance on the ACA exchanges.

CRFB estimated that even this three‑year extension alone would add roughly $300 billion to federal deficits over the next decade, largely because the federal government would continue to shoulder a larger share of premium costs while enrollment and subsidy amounts remain elevated. If Congress ultimately moves to make the enhanced subsidies permanent—as many advocates have urged—the total cost could swell to nearly $550 billion in additional borrowing over the next decade.

Reversing recent guardrails

MacGuineas called the Senate bill “far worse than even a debt-financed extension” as it would roll back several “program integrity” measures that were enacted as part of a 2025 reconciliation law and were intended to tighten oversight of ACA subsidies. On top of that, it would be funded by borrowing even more. “This is a bad idea made worse,” MacGuineas added.

The watchdog group’s central critique is that the new Senate plan does not attempt to offset its costs through spending cuts or new revenue and, in their view, goes beyond a simple extension by expanding the underlying subsidy structure.

The legislation would permanently repeal restrictions that eliminated subsidies for certain groups enrolling during special enrollment periods and would scrap rules requiring full repayment of excess advance subsidies and stricter verification of eligibility and tax reconciliation. The bill would also nullify portions of a 2025 federal regulation that loosened limits on the actuarial value of exchange plans and altered how subsidies are calculated, effectively reshaping how generous plans can be and how federal support is determined. CRFB warned these reversals would increase costs further while weakening safeguards designed to reduce misuse and error in the subsidy system.

MacGuineas said that any subsidy extension should be paired with broader reforms to curb health spending and reduce overall borrowing. In her view, lawmakers are missing a chance to redesign ACA support in a way that lowers premiums while also improving the long‑term budget outlook.

The debate over ACA subsidies recently contributed to a government funding standoff, and CRFB argued that the new Senate bill reflects a political compromise that prioritizes short‑term relief over long‑term fiscal responsibility.

“After a pointless government shutdown over this issue, it is beyond disappointing that this is the preferred solution to such an important issue,” MacGuineas wrote.

The off-year elections cast the government shutdown and cost-of-living arguments in a different light. Democrats made stunning gains and almost flipped a deep-red district in Tennessee as politicians from the far left and center coalesced around “affordability.”

Senate Minority Leader Chuck Schumer is reportedly smelling blood in the water and doubling down on the theme heading into the pivotal midterm elections of 2026. President Donald Trump is scheduled to visit Pennsylvania soon to discuss pocketbook anxieties. But he is repeating predecessor Joe Biden’s habit of dismissing inflation, despite widespread evidence to the contrary.

“We fixed inflation, and we fixed almost everything,” Trump said in a Tuesday cabinet meeting, in which he also dismissed affordability as a “hoax” pushed by Democrats.​

Lawmakers on both sides of the aisle now face a politically fraught choice: allow premiums to jump sharply—including in swing states like Pennsylvania where ACA enrollees face double‑digit increases—or pass an expensive subsidy extension that would, as CRFB calculates, explode the deficit without addressing underlying health care costs.



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Netflix–Warner Bros. deal sets up $72 billion antitrust test

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7 hours ago

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December 5, 2025

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Netflix Inc. has won the heated takeover battle for Warner Bros. Discovery Inc. Now it must convince global antitrust regulators that the deal won’t give it an illegal advantage in the streaming market. 

The $72 billion tie-up joins the world’s dominant paid streaming service with one of Hollywood’s most iconic movie studios. It would reshape the market for online video content by combining the No. 1 streaming player with the No. 4 service HBO Max and its blockbuster hits such as Game Of Thrones, Friends, and the DC Universe comics characters franchise.  

That could raise red flags for global antitrust regulators over concerns that Netflix would have too much control over the streaming market. The company faces a lengthy Justice Department review and a possible US lawsuit seeking to block the deal if it doesn’t adopt some remedies to get it cleared, analysts said.

“Netflix will have an uphill climb unless it agrees to divest HBO Max as well as additional behavioral commitments — particularly on licensing content,” said Bloomberg Intelligence analyst Jennifer Rie. “The streaming overlap is significant,” she added, saying the argument that “the market should be viewed more broadly is a tough one to win.”

By choosing Netflix, Warner Bros. has jilted another bidder, Paramount Skydance Corp., a move that risks touching off a political battle in Washington. Paramount is backed by the world’s second-richest man, Larry Ellison, and his son, David Ellison, and the company has touted their longstanding close ties to President Donald Trump. Their acquisition of Paramount, which closed in August, has won public praise from Trump. 

Comcast Corp. also made a bid for Warner Bros., looking to merge it with its NBCUniversal division.

The Justice Department’s antitrust division, which would review the transaction in the US, could argue that the deal is illegal on its face because the combined market share would put Netflix well over a 30% threshold.

The White House, the Justice Department and Comcast didn’t immediately respond to requests for comment. 

US lawmakers from both parties, including Republican Representative Darrell Issa and Democratic Senator Elizabeth Warren have already faulted the transaction — which would create a global streaming giant with 450 million users — as harmful to consumers.

“This deal looks like an anti-monopoly nightmare,” Warren said after the Netflix announcement. Utah Senator Mike Lee, a Republican, said in a social media post earlier this week that a Warner Bros.-Netflix tie-up would raise more serious competition questions “than any transaction I’ve seen in about a decade.”

European Union regulators are also likely to subject the Netflix proposal to an intensive review amid pressure from legislators. In the UK, the deal has already drawn scrutiny before the announcement, with House of Lords member Baroness Luciana Berger pressing the government on how the transaction would impact competition and consumer prices.

The combined company could raise prices and broadly impact “culture, film, cinemas and theater releases,”said Andreas Schwab, a leading member of the European Parliament on competition issues, after the announcement.

Paramount has sought to frame the Netflix deal as a non-starter. “The simple truth is that a deal with Netflix as the buyer likely will never close, due to antitrust and regulatory challenges in the United States and in most jurisdictions abroad,” Paramount’s antitrust lawyers wrote to their counterparts at Warner Bros. on Dec. 1.

Appealing directly to Trump could help Netflix avoid intense antitrust scrutiny, New Street Research’s Blair Levin wrote in a note on Friday. Levin said it’s possible that Trump could come to see the benefit of switching from a pro-Paramount position to a pro-Netflix position. “And if he does so, we believe the DOJ will follow suit,” Levin wrote.

Netflix co-Chief Executive Officer Ted Sarandos had dinner with Trump at the president’s Mar-a-Lago resort in Florida last December, a move other CEOs made after the election in order to win over the administration. In a call with investors Friday morning, Sarandos said that he’s “highly confident in the regulatory process,” contending the deal favors consumers, workers and innovation. 

“Our plans here are to work really closely with all the appropriate governments and regulators, but really confident that we’re going to get all the necessary approvals that we need,” he said.

Netflix will likely argue to regulators that other video services such as Google’s YouTube and ByteDance Ltd.’s TikTok should be included in any analysis of the market, which would dramatically shrink the company’s perceived dominance.

The US Federal Communications Commission, which regulates the transfer of broadcast-TV licenses, isn’t expected to play a role in the deal, as neither hold such licenses. Warner Bros. plans to spin off its cable TV division, which includes channels such as CNN, TBS and TNT, before the sale.

Even if antitrust reviews just focus on streaming, Netflix believes it will ultimately prevail, pointing to Amazon.com Inc.’s Prime and Walt Disney Co. as other major competitors, according to people familiar with the company’s thinking. 

Netflix is expected to argue that more than 75% of HBO Max subscribers already subscribe to Netflix, making them complementary offerings rather than competitors, said the people, who asked not to be named discussing confidential deliberations. The company is expected to make the case that reducing its content costs through owning Warner Bros., eliminating redundant back-end technology and bundling Netflix with Max will yield lower prices.



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The rise of AI reasoning models comes with a big energy tradeoff

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December 5, 2025

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Nearly all leading artificial intelligence developers are focused on building AI models that mimic the way humans reason, but new research shows these cutting-edge systems can be far more energy intensive, adding to concerns about AI’s strain on power grids.

AI reasoning models used 30 times more power on average to respond to 1,000 written prompts than alternatives without this reasoning capability or which had it disabled, according to a study released Thursday. The work was carried out by the AI Energy Score project, led by Hugging Face research scientist Sasha Luccioni and Salesforce Inc. head of AI sustainability Boris Gamazaychikov.

The researchers evaluated 40 open, freely available AI models, including software from OpenAI, Alphabet Inc.’s Google and Microsoft Corp. Some models were found to have a much wider disparity in energy consumption, including one from Chinese upstart DeepSeek. A slimmed-down version of DeepSeek’s R1 model used just 50 watt hours to respond to the prompts when reasoning was turned off, or about as much power as is needed to run a 50 watt lightbulb for an hour. With the reasoning feature enabled, the same model required 7,626 watt hours to complete the tasks.

The soaring energy needs of AI have increasingly come under scrutiny. As tech companies race to build more and bigger data centers to support AI, industry watchers have raised concerns about straining power grids and raising energy costs for consumers. A Bloomberg investigation in September found that wholesale electricity prices rose as much as 267% over the past five years in areas near data centers. There are also environmental drawbacks, as Microsoft, Google and Amazon.com Inc. have previously acknowledged the data center buildout could complicate their long-term climate objectives. 

More than a year ago, OpenAI released its first reasoning model, called o1. Where its prior software replied almost instantly to queries, o1 spent more time computing an answer before responding. Many other AI companies have since released similar systems, with the goal of solving more complex multistep problems for fields like science, math and coding.

Though reasoning systems have quickly become the industry norm for carrying out more complicated tasks, there has been little research into their energy demands. Much of the increase in power consumption is due to reasoning models generating much more text when responding, the researchers said. 

The new report aims to better understand how AI energy needs are evolving, Luccioni said. She also hopes it helps people better understand that there are different types of AI models suited to different actions. Not every query requires tapping the most computationally intensive AI reasoning systems.

“We should be smarter about the way that we use AI,” Luccioni said. “Choosing the right model for the right task is important.”

To test the difference in power use, the researchers ran all the models on the same computer hardware. They used the same prompts for each, ranging from simple questions — such as asking which team won the Super Bowl in a particular year — to more complex math problems. They also used a software tool called CodeCarbon to track how much energy was being consumed in real time.

The results varied considerably. The researchers found one of Microsoft’s Phi 4 reasoning models used 9,462 watt hours with reasoning turned on, compared with about 18 watt hours with it off. OpenAI’s largest gpt-oss model, meanwhile, had a less stark difference. It used 8,504 watt hours with reasoning on the most computationally intensive “high” setting and 5,313 watt hours with the setting turned down to “low.” 

OpenAI, Microsoft, Google and DeepSeek did not immediately respond to a request for comment.

Google released internal research in August that estimated the median text prompt for its Gemini AI service used 0.24 watt-hours of energy, roughly equal to watching TV for less than nine seconds. Google said that figure was “substantially lower than many public estimates.” 

Much of the discussion about AI power consumption has focused on large-scale facilities set up to train artificial intelligence systems. Increasingly, however, tech firms are shifting more resources to inference, or the process of running AI systems after they’ve been trained. The push toward reasoning models is a big piece of that as these systems are more reliant on inference.

Recently, some tech leaders have acknowledged that AI’s power draw needs to be reckoned with. Microsoft CEO Satya Nadella said the industry must earn the “social permission to consume energy” for AI data centers in a November interview. To do that, he argued tech must use AI to do good and foster broad economic growth.



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