The idea for this article came to me this morning while I was walking my dog Max, so I decided to ask ChatGPT a few questions. After the walk, I got some quick feedback that helped me write the article.
Before writing this article, I had access to a free version of ChatGPT, but due to content restrictions, I now pay $20 per month for the premium version. I've been paying for a suite of Microsoft services since I started my business over 10 years ago, but recently agreed to pay an additional $30 per user per month to add Copilot, an AI companion that helps with a variety of productivity applications.
It's clear that tech companies are benefiting from the surge in demand for AI and associated hardware and software spending, but how are other industries using AI to increase revenue or reduce costs to improve profits?
To make this study more interesting, I first asked ChatGPT to provide me with some examples of companies in the portfolio we manage, and then I asked two summer interns to do the same study without using any AI tools.
With every new wave of technological innovation, there is an initial buzz around the product launch. To fund product development, companies need to be clear about the long-term vision of the solution they are offering. Companies offering new products cannot deliver their products until future versions are developed, so the benefits of their investment often don't materialize until years later.
For years, self-driving cars have been said to be “years away” from becoming a reality, but now many feel that they are truly here. Self-driving cars are in use in a few markets in the United States and are an example of AI in use today. While this may seem exciting, they are not yet ready for large-scale deployment across the country. The technology initially attracted a lot of attention, but was quickly followed by skepticism and safety concerns after accidents occurred. However, the incidence of these accidents was lower than that of human-driven cars. Only time will tell whether self-driving cars will be widely adopted and pass regulatory and ethical scrutiny.
Beyond the exciting use case of self-driving cars, companies like McDonald's and Procter & Gamble are employing AI in more practical ways. McDonald's is using AI to serve hotter, fresher food and simplify the food preparation process in its restaurants. Procter & Gamble's use of AI includes exploring ways to improve its supply chain to better analyze consumer behavior and predict purchasing patterns. This ultimately helps P&G increase both sales and customer satisfaction. Disney is using facial recognition to study audience emotions to improve movies, performances, and TV shows. Coca-Cola and Home Depot are also investing in AI initiatives for similar reasons.
Pharmaceutical companies such as Amgen and Johnson & Johnson are using AI tools to improve manufacturing efficiency and safety. Eli Lilly is focusing on using AI in its drug development process and in partnerships with other companies. The company is creating never-before-thought-of molecular designs as treatments for a range of diseases. In addition to commercial benefits, AI has the potential to save lives.
Financial companies such as Blackstone and JP Morgan use AI to assess the risk of their holdings, develop financial models, and analyze investments. These companies also use AI to better serve their customers using virtual assistants. These assistants help customers navigate online pages and summarize statements. Energy companies such as Exxon and Chevron and utilities such as Nexterra are investing in AI to optimize exploration projects, analyze data to improve equipment functionality, monitor machinery, and improve safety. Again, the goal is to increase profitability by increasing revenue and reducing costs.
Growing companies use the latest tools to analyze data in the most efficient way possible. We are no exception. Although the surveys our interns created in a few hours were nearly as high quality as the ones ChatGPT created in a few seconds, we have no plans to discontinue our summer internship program. These students bring a unique and valuable perspective to the office that can never be replaced by a robot.
Successful companies will adopt AI to improve productivity, increase revenue, and boost profit margins – the business goal. Some jobs will be destroyed, while others will be created. So far, most of the jobs lost have been low-wage jobs, while new opportunities for higher-wage jobs have been created.
It will always be human vision, innovation and creativity that allows certain businesses to differentiate and thrive. AI will likely never replace human ingenuity. AI is a tool, and a great tool.
Daniel Cohen is a Certified Financial Planner and CEO and Chief Investment Officer of Cohen Investment Advisors, a Bedford-registered investment advisory firm.