🦾 Ericsson CEO Börje Ekholm rails against AI regulations and explains why he's a tech optimist: "It has always turned out to be the right thing so far"

This is the first piece based on the interviews I've done for my book about AI. Most of the content will be in the book, but I’ll also share parts of it here on Warp News. Subscribe to our free newsletter so you don’t miss anything.

The unexpected CEO

Börje Ekholm had actually started to wind down. He’d stepped down as CEO of Investor and moved up into the Colorado mountains. Then one day the phone rang. It was Ericsson’s chairman, Leif Johansson. Nothing strange about that in itself—they sat on Ericsson’s board together and were looking for a successor to Hans Vestberg, who had recently been let go as CEO.

Ericsson is one of Sweden’s largest companies, with over 95,000 employees, operations in over 180 countries and a central role in developing global mobile standards like 3G, 4G, and 5G.

The strange part, at least for Börje Ekholm, was the question Johansson asked:

"Would you consider taking this job?"

What was your first thought, Di asked Börje Ekholm later after he'd been appointed CEO.

"That he was drunk," Ekholm replied.

Even though he had to give up his retirement plans, Ericsson was something of a dream job for him. Ekholm is an engineer by training and has always found tech and industry more exciting than finance. Despite that, he had spent most of his professional life working in finance.

Börje Ekholm moved out early to attend high school in the small Swedish town, Västervik. Having to fend for himself at fifteen led to a high degree of independence—something he’s also noticed in his daughters, who moved out fairly early too. When he tried to get them to stay at home longer, they asked rhetorically: Is that what you did, Dad?

He almost ended up living permanently in the US earlier in life. After earning his engineering degree at The Royal Institute of Technology and an MBA at INSEAD, he started working at McKinsey’s New York office. But his girlfriend wanted to move to Sweden. So he quit and followed her back.

"Of course, the relationship eventually ended."

Back in Sweden, he got a job at Investor, where he later served as CEO for ten years. Investor is one of Sweden’s most influential companies, serving as the investment arm of the powerful Wallenberg family and holding major stakes in many of the country’s largest and most important industrial firms, including Ericsson, ABB, and AstraZeneca.

Fastest-growing employee category: Lawyers

I and Börje Ekholm were members on the Swedish government's AI Commission and I immediately noticed he’s not afraid to speak his mind—and he’s something of a quote machine. For years, I’ve criticized the EU for overregulating, especially in AI, where the union oddly seemed satisfied regulating before we even know what problems might arise. Ekholm has been even more active in this space for a long time.

“There’s been a handful of us who have been harping on about this like crazy,” he says.

That was one of the reasons I wanted to interview Börje Ekholm for the book I’m writing about AI. (I’ll also publish parts of these interviews here on Warp News.) Another reason was that when the AI Commission visited Ericsson, I saw they had been very quick to act when it came to generative AI. Large companies often risk being slow because of their size, so when they act differently, it’s interesting to understand why.

But let’s start with the issue of excessive regulations. I say excessive because that’s where the problem lies. That there should be laws and regulations is obvious, but they need to be kept at a reasonable level—otherwise, they become a wet blanket that slows progress.

In the tech space, the EU lags far behind the US. One analysis shows that in terms of market value, the seven largest American tech companies are together 20 times larger than Europe’s top seven, and ten times larger in terms of revenue. European AI investments are about one-tenth of those in the US.

“If your fastest growing employee category in Europe is lawyers, then I have some serious concerns. I still don’t know a lawyer who has built a product,” says Börje Ekholm.

Why he’s a tech optimist

His criticism of regulation partly stems from this, but it has a deeper root.

“I have this kind of naive belief that technology brings good to society. That’s why technological progress is something to embrace, not block. If you regulate something before the development even happens, you are by definition slowing it down.”

In my view, it’s not naive at all. But I ask why he believes technology improves things and why fast development is a good. His answer comes immediately:

“It’s always turned out to be the right thing so far.”

So what does he want to see done about the problem of excessive regulation?

“The first thing the EU should do is just freeze all new regulations. Just say stop. And then step two is actually to remove some of the existing ones. I think you really need to go through and ask: Do we need this regulation? What exactly are we protecting against? For example, we don’t need such a strict GDPR regulation.”

The EU seems to be coming to a similar realization. Last year, Commission President Ursula von der Leyen asked Mario Draghi to look into this, and he delivered strong criticism in a report. Now there are rumors that GDPR may be loosened.

Börje Ekholm has noticed a shift in tone too. “It sounds different now, so I think there’s a bit of hope after all.”

Ericsson was early with generative AI

So how did it happen that Ericsson was so early on generative AI?

“We made a push in 2018–2019 by asking: What in telecom networks is actually valuable? It’s the data. So we asked: How can we use that data to make better products? To teach products to act in different ways. That’s when we started hiring people we’d never had before, and several of them had AI knowledge. When they looked at the data, they said: ‘We can build a large language model here.’ So someone started working on that. It costs a bit of money, but that’s something you just have to allow. So that’s why we were quite early—not because we knew ChatGPT was coming, but simply because we wanted to manage our data better.”

Several of Börje Ekholm’s insights on AI will be in the book, but I’m sharing a few here because I think he really nails how we should think about AI.

First, he sees AI—and especially generative AI—as something truly major:

“I think this might be the most powerful horizontal technology we’ve ever seen.”

Second, he believes that efficiency shouldn’t be the main focus:

“There’s too much discussion about efficiency. What it really does is create digital employees—whether you call them agents or something else. But your supply of competence becomes enormous. And this allows me to do lots of new things in the company. I can develop new products, I can do it faster. I can add other features to them. I can sell them to customers in completely new ways.”

Finally, I had to ask if he regrets saying yes to becoming Ericsson’s CEO. It doesn’t seem like it:

“It’s not easy. I think it’s hard. But I’ve never done anything this fun.”

Mathias Sundin
Angry Optimist