According to the market analysis published by Precedence Research, which observes trends from 2022 to 2032, the turnover of the artificial intelligence sector will grow by 19 per cent annually until 2032. A more optimistic report was published by Fortune Insight in May: “Artificial Intelligence Market Size to Surpass $2trn by 2030, exhibiting a CAGR (Compound Annual Growth Rate) of 21.6 per cent.”
In short, from any angle, it seems that artificial intelligence is destined to generate a level of growth that would be tempting to any investor.
Of course, there are also risks and potential negative effects that such a revolution could unleash on the global economy and the job market. How many people will lose their jobs? Will the workforce be able to retrain? Will there be a deflationary effect? And who will foot the bill? All these questions will eventually need legislative answers. The impacts of artificial intelligence are currently a subject for futurists, but they could soon become a topic for lawmakers.
While waiting to find out what will happen, we can take for granted that artificial intelligence will continue to dominate the world of work.
Less clear is the list of companies that will benefit from this revolution. The history of major industrial revolutions is filled with companies that rise, expand, burst, and are forgotten.
In short, we may see many meteors explode before discovering the Google and Amazon of the fourth industrial revolution (if there will be any). This is not a minor risk in a market where valuations, measured, for example, by the price-to-earnings ratio, of some companies specialised in the sector reach exorbitant figures with ratios above 30/40 times, against an industry tech average around 25 times.
As we mentioned, for now, a large portion of the pie is still in the hands of mega-cap companies.
Microsoft is being rewarded by investors for being the first company to invest in OpenAI, the company that programmed ChatGPT, and has invested $13bn in it since 2019.
The company has stated that for every percentage point of market share it gains in the search engine sector, it will have an opportunity for $2bn in annual advertising revenues. Alphabet, the parent company of Google, has launched its own version of ChatGPT called Bard, in an attempt to enhance the capabilities of its search engine.
Giant footsteps
And it’s recently been announced that Meta will collaborate with Microsoft for the development of Llama2, its own artificial intelligence model to be used for research and commercial use.
In addition to the Big Tech companies, other evident beneficiaries are the companies that manage the infrastructure to make the system work (semiconductors, software, internet companies).
