Bryce Maddock: Dan thanks so much for the question. So we’re incredibly excited about the revolution that’s taking place in generative AI. And as you say, there are two important questions that we need to ask when considering the potential implications of this technology for TaskUs. The first question is in what ways can we support the creation of these generative AI technologies? As I mentioned on the call, we’re working with the market leader in the space, providing them trust and safety and AI services. And since our last call, this industry has exploded with hundreds of new entrants and hundreds of millions of dollars in venture funding. We’re engaged with many of these companies on opportunities to provide them with our AI services and trust and safety support.
As with past technology trends in social media and on-demand transportation and food delivery, we plan to become the industry leader for short €“ support services for degenerative AI space. But the second question that we need to ask is what will the impact of generative AI be on our Digital CX business? Our digital automation team has been working with open AI’s GPT-3 API for over a year, and we’ve built a number of amazing prototypes and are actively engaged with clients to use this technology to improve the efficiency of their support process. In fact, in 2022, we launched a scaled support solution using generative AI technology for one of our large enterprise customers. The results are really exciting, but there are also challenges. Large language models have a well-documented tendency to hallucinate, in other words, make up an answer.
And these models must also be integrated into our client’s existing technology stack in order to be effective. So for the foreseeable future, generative AI is going to create a lot more work for service providers and system integrators than it will destroy or cannibalize. In the next few years our belief is that most of the profits in this industry are going to accrue to picks and shovels providers like TaskUs. But long-term the question is what will the impact be? And at this point, I’d say anyone who claims to understand exactly what the impact is going to be from the technology would be speculating. So if I had to speculate, I would say that I’m watching two trends that I think may emerge. The first is that there may be a reduced need for native language support as translation models improve, support and moderation will be able to be performed in the lowest cost country.
And here I think our operations in the Philippines and India are particularly well suited. And second, there is likely to be an increase for demand for white-glove support. And this is because when simple support interactions are automated, one of the key ways companies will differentiate from one another will be based on the quality of support in those moments that matter. Here, our focus on premium support positioned us well to deliver. So it’s early days, but we’ve been very excited about this space. I think we’ve seen solid progress and we’ll continue to stay on top of it in the quarters to come.
Dan Perlin: Yes, that’s a great answer. Thank you. Just a quick follow up on gross margins. As you think about kind of the pivot to more offshore out of the United States and the pace of that change is that cadence €“ I mean obviously it’s positive for gross margins, but is that cadence, I guess, consistent with the trends that we would expect to see within EBITDA? Or is there a timing difference between certain aspects of that? Thanks.
