From ChatGPT on OpenAI, alphabetA new large-scale language model, Bard, was designed for the Google search platform.
The potential of this new technology is becoming more and more apparent, and the estimates of its impact on the economy as a whole are staggering. Research firm McKinsey & Company believes global economic activity could increase by $13 trillion by 2030, while Ark Investment Management estimates that figure could be $200 trillion. I predict there will be.
Interest in artificial intelligence is growing
No wonder more companies want to participate. According to FactSet, executives of 110 different companies around the world S&P500 The stock index explained AI during its most recent quarterly earnings call with investors that ended March 31.
Not only is this an all-time high, it’s an 80% increase from 61 just one year ago.
McKinsey & Company predicts that companies that adopt AI earliest will reap far greater financial returns than those that waited until the second half of the decade. Companies that don’t use AI at all by 2030 could actually see: rejected in free cash flow.
With that in mind, here are two companies at the forefront of AI that investors can buy right now.
1. Tesla
electric car superpower Tesla (TSLA 4.72%) I have been working on AI for 10 years. The company is applying this technology to its autonomous self-driving software, which will serve as the foundation for its long-awaited robotaxi. The software is already in beta mode, with an estimated 2.7 million customer vehicles currently driving and collecting data, and Elon Musk believes it will be ready for public release later this year.
It could change the face of the passenger car industry. In an interview with CNBC’s David Faber, Musk said the average person spends 10 to 12 hours a week in their car, spending most of that time at work or in their home parking lot. By installing self-driving software, that same car would allow him to spend 50 hours a week on the ride-hailing network, earning revenue for both the owner and Tesla.
The emerging industry could generate $4 trillion in annual revenue as early as 2027, according to Ark Investment Management estimates. Tesla will make money from software sales and a split of the ride-hailing fees generated by each customer’s vehicle. . Musk said this would change the economics of building each Tesla vehicle, boosting gross margins from 25% to 70%.
No other car company is as advanced in the field of autonomous driving. And since Tesla is already the only truly profitable pure electric car maker, widespread self-driving technology could add trillions of dollars to the company’s value. in the long run.
But that’s not the only area Tesla plans to use AI. Earlier this year, the company unveiled the latest prototype of its humanoid robot, Optimus. The robots could replace human workers in low-skill jobs such as manufacturing. A mainstream release is still a few years away, but Tesla plans to sell millions starting in 2027, priced at around $20,000 each.
Tesla is inching closer to monetizing AI at scale, and the potential value of that opportunity is worth enough to buy a stake in the company today.
Image Source: Getty Images.
2. Amazon
Amazon (AMZN 4.44%) is best known as the world’s largest e-commerce company with over $220 billion in online sales last year alone. Behind this success is his army of 520,000 AI-enabled robots that help run fulfillment centers, making Amazon the single largest player in the robotics industry.
Robots can work 24 hours a day, need no benefits, and never take days off. This makes a big difference in terms of productivity. Amazon’s focus on offering consumers low prices and high volume sales of its products has resulted in its e-commerce division operating at very thin margins and often incurring operating losses. I have. Saving money on fulfillment operations can mean the difference between making money or losing money in the long run, and more robots mean more efficiency.
According to Ark Investment Management, in 2015 the average robot could pick and pack 30 items per hour. Thanks to rapid advances in the industry, a fulfillment robot can now pick and pack 1,000 items per hour, making it 2.5 times more efficient than a human. Typically 400 items can be processed per hour.
Amazon is also the world’s largest provider of cloud computing services through its Amazon Web Services (AWS) platform and is rapidly becoming a leading distributor of AI technology. AWS was the first cloud provider to run Nvidia The company has GPUs in its data centers and in March announced another significant collaboration with a chipmaker to enable customers to train larger-than-ever language models on new Amazon EC2 P5 instances. announced.
This enables businesses large and small to scale computing power from 10,000 GPUs to 20,000 GPUs with on-demand access to supercomputer-like performance to train cutting-edge AI applications. AI startup Anthropic, founded by former OpenAI execs, plans to use EC2 P5 instances to advance deep learning research and AI model development.
This is a significant advance in the fight against AWS’s closest competitors. microsoft Azure is investing heavily in AI services for cloud customers. Overall, I think Amazon has a long-term path to a $5 trillion market cap, and its presence in industries like robotics and AI will be big contributors.
Alphabet executive Suzanne Fry is a member of the Motley Fool’s board of directors. John McKee, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Anthony Di Pigio has no positions in any of the mentioned stocks. The Motley Fool has positions in and endorses Alphabet, Amazon.com, Microsoft, Nvidia and Tesla. The Motley Fool has a disclosure policy.
