Interview: How Deutsche Bank Sources the Best AI Models

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Introduction:  

In this interview, Chuck discusses with Rodrigo strategic sourcing at Deutsche Bank, which involves finding the best suppliers and vendors for data, infrastructure, and AI models needed to build AI solutions. Rodrigo explains that they evaluate startups and established companies, managing risks and relationships to acquire emerging technologies. He highlights the rapid growth of generative AI like ChatGPT and the need for responsible AI practices across the industry. 

Understanding Strategic Sourcing 

Chuck Martin 
What is strategic sourcing? 

Rodrigo Costa 
So if we're talking about AI and building a model, you need three pieces of information. 

You require data to train your model. You require infrastructure, computing power. And most importantly, you require the model and the mathematical understanding behind it. 

What we do in strategic sourcing is we search for the best players in the market that have these resources, and we try to acquire them for the company. 

Suppliers vs. In-House: Decision Making in Strategic Sourcing 

Chuck Martin 
So, is it basically looking at the correct suppliers or vendors? 

Rodrigo Costa 
Yes, we look at the correct suppliers and vendors, and we help the business decide whether it’s better to do something in-house or buy it externally. 

Choosing Between Startups and Established Companies 

Chuck Martin 
How do you decide between a startup with innovative technology or a big established company that’s not as innovative? 

Rodrigo Costa 
Inside the financial industry, we have different doors to engage with different players. If it's a big vendor, it usually goes through global procurement and sourcing in our department. 

If it’s a small startup, we have corporate venture capital to take over because that’s a different type of relationship. 

Managing Risk and Supporting Startups 

Chuck Martin 
So you basically have to invest in the company to ensure it doesn’t go away? 

Rodrigo Costa 
For startups, yes. For big companies, we have contracts to manage that relationship. The big companies are easier to handle, but startups are different. 

Challenges in Managing Startups in Financial Services 

Chuck Martin 
What happens with startups in financial services? There are so many new companies here at the show doing exciting things. 

Rodrigo Costa 
It’s exciting, but big banks like ours cannot take big risks. We actively manage risks as part of our job, so we have to consider how we can support startups while managing risk. We also help them accelerate and engage with the right players in the market. 

AI Supplier Management: Challenges and Solutions 

Chuck Martin 
In the AI space, with so many suppliers, how do you see them all? 

Rodrigo Costa 
That’s a good question. There are so many players, and it’s difficult to assess, control, and manage them. We have systems to validate, balance, and monitor these vendors, and we actively maintain relationships with them to ensure alignment. 

Acquiring Emerging Technologies in Financial Institutions 

Chuck Martin 
For a financial institution as large as yours, how do you acquire emerging technologies now? 

Rodrigo Costa 
It’s no longer just one person making the decision; it’s a team effort. AI is an exciting topic with so many opportunities. Events like this are important because they allow us to meet people, understand their strategies, and figure out how we can use them to benefit not just Deutsche Bank, but the whole industry. 

Reflecting on AI Predictions: The Rise of Generative AI 

Chuck Martin 
Looking back a year, what would you have predicted? 

Rodrigo Costa 
No one predicted generative AI. ChatGPT was a major development in generative AI. It went from zero to 100 million users per month in just three months, which shows how excited people are about AI and how useful they find it. 

The Need for Responsible AI 

Rodrigo Costa 
The AI market is moving at an accelerated pace, and while there’s excitement, we need to be careful in how we engage with it. That’s why this year’s discussions about responsible AI are so important. This is something the whole industry, including us, is focused on. 

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