The outgoing chief executive of Pearson promised to continue its adoption of new technologies yesterday, despite comparing the fast-advancing world of generative artificial intelligence with “a bratty teenager who’s always right, even when they’re wrong”.
The London-listed educational publisher also launched a £300 million share buyback alongside a forecast that its full-year profits would be fractionally higher than suggested previously.
In his last set of results before he steps down, Andy Bird, Pearson’s chief executive, said there were high levels of engagement by students with the company’s recently introduced generative AI tools, although the the technology was at an early stage. Describing how different models “confidently” came up with different answers to the same question, he said: “We have to make sure that any output from Pearson’s use of generative AI is accurate so that it can be trusted.”
He said the company was watching the issue of copyright closely. Authors and musicians have brought technology companies to court over the use of their material to power their “large language” models, the engines of generative AI. However, Bird, 59, said the company’s information would be key to the success of the technology. “That’s where we see the value in our high-quality datasets, in terms of ‘high-quality data inputs lead to much higher-quality data outputs’.”
In a third-quarter trading update, Pearson said its sales had risen by 2 per cent in the three months to the end of September, with revenue from English language learning up by a third. That, in turn, informed its decision to predict annual profits of between £570 million and £575 million, up £20 million on its earlier outlook.
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The company has undergone a difficult transformation from a purveyor of textbooks to an educational technology business. It was one of the best-performing stocks in the FTSE 100 index of leading shares last year. Bird joined as chief executive in 2020, having been chairman of Walt Disney. Omar Abbosh, 57, its new chief executive, was chosen especially from the world of technology to continue this trajectory.
Under Bird, Pearson has repositioned itself as a technology company, expressing interest in using innovations such as the metaverse and virtual reality for teaching purposes. It is also examining digital tokens and online ledger technology, known as blockchain, to register its products and keep track of ownership.
There has been speculation that the company could look to New York for a secondary listing, something it has not ruled out. Pearson will host its investor day in the city next Monday, though Bird said this was not a sign that it was making a move. “We are getting a great deal of interest from a US investor base and in fact have increased our US shareholding over the past several months,” he said. “We felt it was a good opportunity to showcase the company to US investors and potential US investors.”
Shares in Pearson closed up 27p, or 2.9 per cent, at 946½p.
• Industry experts have warned that Rishi Sunak’s plan to increase taxpayer spending on artificial intelligence chips and supercomputers to £400 million is underwhelming (Lottie Hayton writes). The prime minister plans to use the package for new facilities and equipment, according to the Telegraph. Sachin Dev Duggal, a co-founder of Builder.ai, said: “While it’s a promising step, there’s absolutely room for improvement. When you have UK AI companies raising more than that, £400 million simply isn’t enough.”
