00:00 Brian Sotzi
Morgan Stanley believes AI is seeing its adoption of up to $16 trillion to reshape the future of work and create market value for the S&P 500. I'm happy to meet you, Stephen. So let's start with that statistic. That's because it's the grabber for the heading. He says that adoption of AI could lead to the creation of market value up to $16 trillion in creating long-term market value for the market. Tell us how you reached that number, Stephen. What is the methodology?
00:46 Stephen Bird
Yes, it was a pretty deep dive. The way we approached it was literally at the task level and the occupational level, and the basic dataset actually came from humanity. Humanity has this amazing data set called the Economic Index. And essentially, what humanity had was seeing all tasks, defined by the Bureau of Labor Statistics, examined the extent to which that particular task could be automated by AI. All tasks related to each task were then linked to occupations using data from the UH U.S. Bureau of Labor Statistics. And we linked it to each company regarding a mix of company-level occupations. Well, you're right, the results were relatively surprising. Well, I emphasized it all. The fact that AI is currently permeating many economic activities. I was a little surprised to see the range of occupations in which AI is used.
02:20 Brian Sotzi
Stephen, if it's a big trend, and your Morgan Stanley client can ask you. “It's okay, if it's a big trend, if it's a big theme, if it's a winner and a loser from the perspective of the sector of that theme, Stephen?
02:46 Stephen Bird
As you know, that's interesting to me, this was also a bit surprising. For example, many software developers were hoping to screen at the top. But what we did is look at the magnitude of profit compared to the company's pre-tax income. What's interesting is that it is a relatively low technology sector and does not naturally consider AI as uh. Many consumer sectors, real estate, UM transport, many UH heavy industries, some medical fields. And essentially what we found is that many of these industries have many people with many use cases of AI, which can fit more money in comparison to those companies' pre-tax income. So this could be a real needle mover for many industries.
