For those who might have missed it, artificial intelligence (AI) is taking the U.S., and arguably the world, by storm. To appreciate why this is happening, we should probably take a moment to familiarize ourselves with AI is and its ever-growing role in our day-to-day lives. In short, AI is an umbrella term for numerous technologies, such as machine learning, deep learning, and natural language processing (NLP), used to perform tasks that typically require human intelligence. Examples of such technologies include chatbots, facial recognition, digital assistants, and smart home devices. ChatGPT, Microsoft Copilot, and Google’s Bard also fit under that umbrella.
What Businesses Stand to Gain From Embracing AI
Many benefits come from embracing and employing AI technology from a business standpoint. That’s the takeaway from an article recently published by Forbes. It revealed that AI can benefit small businesses and major corporations in the following areas:
- Automating repetitive tasks and processes
- Facilitating quick decision-making
- Full-Time availability
- Improves processes and workflows
- Quickly and efficiently handles big data
- Reduces human error
Along with these many benefits, AI improves productivity and boosts revenue. That’s the conclusion reached in a study published by McKinsey & Company. It revealed that many leading organizations are already ahead of the curve with AI, with many reporting that at least 20 percent of their earnings before interest and taxes (EBIT) in 2022 was attributable to them embracing and using AI technology. Some of the companies that are taking the AI bull by the horns and making it work in their favor, according to a separate study from The Motley Fool, include the following:
- Amazon
- Meta
- Tesla
- Microsoft
- OpenAI
- Netflix
- Alphabet
- JPMorgan Chase
- Boeing
- Johnson & Johnson
- ExxonMobil
In addition to these business juggernauts, many smaller businesses are jumping on the proverbial AI bandwagon. Multiple studies show AI is gaining interest among businesses in the finance, education, healthcare, marketing, and manufacturing sectors. The same applies to those in logistics, retail, cybersecurity, eCommerce, and many other industries.
How Some Businesses Are Leveraging AI Technology to Boost Revenue
From finance to retail and everything in between, many businesses in many industries are leveraging AI technology to boost revenue. In retail, for example, some businesses are using machine learning, deep learning, and other AI technology to collect and analyze consumer data to make more informed decisions relative to stocking merchandise, pricing strategies, and creating advertising campaigns. All of these help generate revenue. Some companies in the healthcare space are using machine learning and natural language processing to automate data-intensive tasks, which improves efficiency and accuracy and helps with decision-making.
Some physicians use both technologies to identify diseases in patient records and even create treatment plans. Machine learning and natural language processing have helped the healthcare industry generate millions in revenue, which is why artificial intelligence (AI) in the healthcare market is exploding. According to Precedence Research, a worldwide market research and consulting firm, the global AI healthcare market had a $15.1 billion valuation in 2022 and is on track to reach or surpass $187.95 billion by 2030, growing at a compound annual growth rate (CAGR) of 37% between 2022 and 2030.
Finance is another industry that is seeing a boost in revenue because of AI, especially startup fintech companies. Available data shows many use AI technology to improve customer experience and, in terms of revenue, optimize customer costs. Many larger banks and financial services companies are turning to AI-driven applications to help them automate processes, increase efficiencies, and expand into new markets to boost or create new revenue streams. But that’s not all; many are also leveraging AI to help with the following:
- Customer onboarding
- Customer segmentation
- Predictive analytics
- Trend analysis
What Kind of Impact Can AI Have on the Labor Market?
Having discussed how businesses across varying industries have started using AI to drive down operating costs, streamline tasks, and generate revenue, let’s shift gears and look at the impact AI might soon have on the labor market. Although AI technology is still in its early days, it is already clear that it impacts minimal, moderate, and significant industry groups differently. So that everyone is on the same page, the minimal group comprises construction, mining, energy, and utility businesses. Businesses classified as financial, retail, real estate, and transportation represent the moderate group. The significant group comprises those businesses in the technology, professional services, healthcare, and automotive industries.
The minimal group will be the least affected, and the significant group will be severely affected. That is from an employment perspective. Some studies show that as much as 39% of tasks performed by humans in these groups could become automated in the next decade because of the rate of AI adoption.
What Investors Should Know About Navigating the New World of AI
AI can, among other things, increase productivity, but sometimes, it does so at the expense of the economy, namely by potentially affecting in unpredictable ways labor, interest rates, stock prices, and the like. And that can prove challenging for new and even seasoned investors. For those looking to invest in AI or companies that use the technology, you should make risk management your friend. That’s because doing so can go a long way toward preventing or mitigating potential losses. To learn how risk management tools, such as customizable analytics, customized reporting, and access to advanced risk metrics, can help you make better and more informed investment decisions, consider contacting Fund Studio today.