In the short term, markets move on trends and narratives, rather than the favourable evolution of fundamentals. The emergence of artificial intelligence, initially through OpenAI’s ChatGPT app, has once again served as momentum for new tech companies, which have rebounded sharply after equally strong declines in 2022. It is still too soon to determine the scope of these new technological developments that will inevitably drive the transverse improvement of the economy across multiple sectors.
AI is undoubtedly one of the most disruptive technologies of our era, and its impact on business will be profound and transformative. From the automation of routine tasks to undertaking large-scale data analysis and decision-making based on sophisticated algorithms, AI is revolutionising the way organisations operate and compete in the market. In that vein, let us explore the scope and implications of AI and how companies are benefitting from this innovative technology.
- Automation of tasks: One key area where AI has had a significant impact is in task automation. Through the use of machine-learning algorithms and natural language processing, companies are managing to automate routine and repetitive tasks, thus freeing up time and resources for their employees to perform higher value-added functions. From chatbot-based customer service to automated production processes, AI is improving business efficiency and productivity.
- Decision-making and data analysis: AI is also driving significant advances in data analysis. Thanks to its ability to process and analyse large volumes of data quickly and precisely, companies can gain valuable insight into their customers, business transactions, and market trends. This enables them to make more informed and strategic decisions, which in turn yields better business performance and a competitive advantage.
- Improved customer experience: AI is changing the way companies interact with their customers. Using machine-learning algorithms, companies can tailor the customer experience, offering recommendations and relevant content on a one-to-one basis. AI has also fuelled the development of intelligent chatbots and virtual assistants that can provide 24/7 support and care. This has improved customer satisfaction by offering quick and accurate responses, in addition to greater convenience.
- Optimisation of business processes: AI is being used to optimise business processes across several areas, such as supply chains, inventory management, and production planning. By analysing data in real time, AI algorithms can identify patterns and trends, enabling companies to make more efficient and profitable decisions. This in turn has helped reduce costs, improve operational efficiency and enhance business agility.
- New business opportunities: AI is generating new business opportunities and revenue models for companies. Its ability to process vast amounts of data and extract significant insights has allowed for the development of innovative products and services. From virtual assistants to autonomous vehicles, AI is driving the creation of new products and services that improve people’s lives and open up new markets.
Those companies that effectively embrace and leverage artificial intelligence will be better poised to meet future challenges and capitalise on emerging opportunities. AI is a powerful driver of change that is reshaping the business world and re-defining the future of organisations.
We understand, not by coincidence, that these changes are being enacted at leading companies that have an innovative culture in their DNA and that have offered tech-based solutions to their customers for years, many of which—given their quality and profitability—are part of EDM’s funds. These include Microsoft, Nvidia, ASML, Adobe and Amazon, to name a few.
The impact of the AI narrative has resulted in an uneven recovery in shares, with indices rising on the value of a few securities. This is the case on the US stock market, where the S&P’s recovery is due to only a handful of positions, while the rest remain flat, as the following table illustrates. This trend is also evident in other indices.
To end on a lighter note and combat the unease you may be feeling about the rise of artificial intelligence, we share this cartoon recently published in The New Yorker.
