Artificial intelligence has quickly become a hot topic around dinner tables and in corporate boardrooms. But delivering business benefits from AI will take time. Investors should proceed with caution.
There’s been an explosion of hype around the disruptive capabilities of generative AI. Since ChatGPT launched, AI’s popularity on Google has surged (Display, left). Everyone is playing with chatbots, but AI isn’t just for fun and games. Ask ChatGPT how AI might transform business, and it spits out a list of applications from virtual assistants for customer support to predictive analytics, fraud detection, and futuristic autonomous vehicles and drones.
Companies Rush to the AI Party
During the first-quarter earnings season, about 20% of US companies and global companies talked about AI on their earnings calls, based on our parsing of earnings-call transcripts (Display, right). Unsurprisingly, technology companies were the biggest advocates, yet in consumer discretionary, financials, healthcare, and industrials, AI was on the agenda, too. The fervor hasn’t infected every sector. But this revolution is just beginning.
AI requires massive computing power and, so far, its enablers have been the biggest winners in equity markets. Other companies that will be users of the technology are exploring how to deploy AI to solve bottlenecks and create efficiencies.