AI has stoked a number of fears, including increasingly sophisticated fraud and phishing scam activity. But, what if artificial intelligence is actually an inflection point for many industries?

Yahoo Finance's Julie Hyman and Brian Sozzi are joined by Cloudflare (NET) CEO Matthew Prince at the World Economic Forum in Davos, Switzerland to talk on the downside risks anticipated for AI integration and some of the enhanced cybersecurity defenses AI can contribute to: "The good guys have more data, they can use these systems to get ahead of the bad guys."

At the same time, Price is very aware of these AI downsides.

"There are people who are sort of the ultimate AI pessimists... people are the ultimate AI optimists — I kind of find myself somewhere in between," Prince says on job displacement and difficulties in fully realizing AI-powered products.

It's all part of Yahoo Finance's exclusive coverage from the World Economic Forum in Davos, Switzerland, where our team will speak to top decision-makers as well as preeminent leaders in business, finance, and politics about the world’s most pressing issues and priorities for the coming year.

Watch this full episode of Yahoo Finance Live here.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

[AUDIO LOGO]

BRIAN SOZZI: The future of AI is playing out at the World Economic Forum in Davos, Switzerland. Let's talk some AI, and well, the future of that AI with Matthew Prince, the CEO of Cloudflare. Good to see you again.

MATTHEW PRINCE: Thanks for having me.

BRIAN SOZZI: Of course. So we've been focused a lot on how AI can boost productivity. What's the other side of the coin? What are some of the risks you see with the technology that you're gaining access to?

MATTHEW PRINCE: Yeah, I think one of the things that we've really been talking about here at Davos is some of the downsides of AI. What are some of the things that-- people are committing fraud, people who are trying to do malfeasance online-- what can they do with AI?

And I think we're going to see a series of stories over the course of the next year. Some of them are already coming out about people who are being tricked because someone can replicate their voice, replicate what they look like, replicate sort of everything that seems human about them to trick people into maybe sending money, doing other things. And I think that's one of the big topics that we've been talking about here at WEF.

JULIE HYMAN: I imagine, as well in your business, which is part of it is cybersecurity--

MATTHEW PRINCE: Yup.

JULIE HYMAN: --that you're also going to be seeing those bad actors use AI, generative AI to try to gain access to systems. How do you get ahead of that?

MATTHEW PRINCE: Yeah, I think the good news is that in the AI space, it's really about who has the data. And so if you think about someone like Cloudflare, Cloudflare sits in front of somewhere between 20% and 25% of the web. And we see just a huge amount of traffic on any given second. We're having over 100-- almost 100 million requests flow through our network.

And we, from the very beginning, have used machine learning systems to analyze that flow of data. And just like we've all been amazed at how things like ChatGPT have started to become really incredible in the last 24 months, inside of Cloudflare, our machine learning systems have started to identify new security threats that no human has ever seen before.

And so I'm actually optimistic that while we're going to see some really kind of scary stories over the next year, the good guys have more data. They can use these systems to get ahead of the bad guys. And that's what we're doing every day at Cloudflare.

BRIAN SOZZI: How concerned are you about the unknowns around AI? Julie and I went to an event last night, and we looked at how AI is changing the music industry. And like wow, this is some wild stuff. But that's AI for good. I mean, how concerned are you about things that we can't even see today?

MATTHEW PRINCE: You know, I think there are people who are sort of the ultimate AI pessimists, that this is going to be sort of a Terminator-like scenario. There are people who are sort of the ultimate AI optimists. I kind of find myself somewhere in between. I think that it's going to change a lot of what we do.

I think there's going to be a lot of displacement of some people's jobs that are there, like almost any technology that comes out. And we should really acknowledge and understand the risks that come along with that. But I also think it's going to be enabling a lot of other amazing things.

So if you look at another event that's happening this week is the Sundance Film Festival. And the ability to do things with AI today like automatically dub a movie into another language with the actor's lips moving in that way-- that dramatically expands the audience for things like independent film. And I think that's going to be an incredible thing for the creator economy.

JULIE HYMAN: Something else I keep wondering this week-- because every conversation is about AI-- if we're overdoing it at this stage, right? Particularly-- like with your business, how much of it is-- and generative AI specifically, how much of it is even related to that at this point? How much of it will be a year from now, five years from now?

MATTHEW PRINCE: Yeah, I think, I mean, there is an enormous amount of AI excitement. And I think unlike some technologies-- like I think, some of the excitement around blockchain has somewhat faded. I don't think AI is going to fade over the long term.

But if I had to predict, I would say 2024 is going to be kind of the year of the AI letdown. It's going to make us recognize that it's really easy to create an AI demo, which is incredibly impressive, but it's very hard to take that demo and turn it into a product. That doesn't mean we won't turn it into a product, but I think it's going to be harder than we think.

I don't think those products are going to come in 2024. They may not even come in 2025. I think they are coming, but it's actually going to take us learning how to do engineering in a different sort of way.

Most engineering products-- if you have y plus 1 equals x, no matter what y you put in, you always get the same x. AI doesn't work that way. It's non-deterministic. So every y comes up with a different x. And doing engineering in that kind of environment is a very different thing than traditional engineering.

BRIAN SOZZI: The first conversation we had here at this Davos was with Bill Gates. And I don't think he was ready to yet say that AI was going to influence this election. Do you share that view?

MATTHEW PRINCE: That--

BRIAN SOZZI: Influence this election. AI will influence an outcome or inform people in a way that maybe isn't true.

MATTHEW PRINCE: Yeah, I'm hopeful that that isn't going to be the case. But obviously, the elections this year, not only in the United States, but around the world-- almost half of the global population is going to vote this year. And so elections are incredibly important.

We're focused on cybersecurity. I think that media organizations, like yourselves, have an absolute duty and responsibility to be looking out for AI-generated content, making sure that people know what's real and what's fake. And that's going to be a part of this election.

But I don't think this is going to be the election of AI. I think that might be coming in the future. And we all have to be cognizant of that and worry about the risks around that.

BRIAN SOZZI: All right, let's leave it there. Cloudflare CEO, Matthew Prince. Always nice to get some time with you. Thanks, we appreciate you. Thank you.

MATTHEW PRINCE: Thank you for having me.

JULIE HYMAN: Thank you.