Morgan Stanley Reveals Non-Tech Companies Profiting from Generative AI
Quantifying Revenue Opportunities and Cost Savings
Morgan Stanley analysts have identified companies that have quantified the financial benefits of using generative artificial intelligence (AI). Through an analysis of first-half results announcements and earnings calls from firms with a market capitalization of $10 billion or more, Morgan Stanley found that 29 companies have quantified the revenue opportunity, while 36 companies have quantified a cost or productivity gain. Interestingly, the list includes not only tech giants like Alphabet, Meta, and Microsoft but also non-tech companies that are reaping the financial rewards of generative AI.
Wide Range of Applications
According to the analysts led by Edward Stanley, these non-tech companies are utilizing generative AI for various purposes. Energy companies are leveraging it to expedite material discovery, industrials companies are using it to manage equipment failures, and healthcare companies are accelerating drug discovery. The versatility of generative AI is evident in its ability to benefit diverse industries.
Success Stories from Reporting Companies
Morgan Stanley's note highlights the success stories of several reporting companies. Alphabet reports strong demand for its generative AI offerings, with the number of customers growing more than 15 times from April to June. Meta notes that AI-recommended content from accounts users don't follow is now the fastest-growing category on Facebook's feed, resulting in a 7% increase in overall time spent on the platform. Microsoft boasts over 11,000 customers using its Azure OpenAI Service, with nearly 100 new customers added daily in the latest quarter. Intesa Sanpaolo, an Italian bank, expects the number of its AI use cases to rise from 35 to 140, generating a benefit of €0.5 billion in gross income.
Transformative Impact in Various Sectors
Other companies experiencing the transformative impact of generative AI include Ceridian HCM, which reports increased customer support productivity, and VAT Group, which anticipates significant AI-related revenue growth. AstraZeneca highlights how AI has accelerated drug development, while Comstock emphasizes the time and cost savings achieved in material selection. Vertiv has received AI-related orders worth tens of millions of dollars, and Bruker expects a substantial portion of its future revenue to be driven by AI trends.
In conclusion, Morgan Stanley's analysis reveals the widespread financial benefits of generative AI across industries. The success stories of both tech and non-tech companies demonstrate the potential for increased revenue and cost savings through the implementation of AI technologies. As AI continues to advance, its impact on productivity and efficiency is expected to drive further growth and market returns.
Hot Take: The Implications of Generative AI for New Businesses
Morgan Stanley's analysis provides a compelling look at how generative AI is not just a tech industry game-changer, but a transformative force across diverse sectors. This presents a crucial insight for new businesses: generative AI is not a distant, exclusive technology, but an accessible tool that can drive significant financial benefits.
Democratizing AI Benefits
The fact that non-tech companies are reaping the rewards of AI breaks down the notion that AI is the exclusive domain of tech giants. This democratization of AI benefits opens up opportunities for new businesses to leverage AI for revenue generation and cost savings, regardless of their industry.
Adapting to AI Trends
The wide range of applications for generative AI, from material discovery in energy companies to drug discovery in healthcare, underscores the adaptability of AI. New businesses can take a cue from these success stories and explore how AI can be tailored to their unique needs and challenges.
Driving Growth and Market Returns
The transformative impact of generative AI on various sectors, as highlighted by Morgan Stanley, suggests that AI adoption can be a strategic move for new businesses. By implementing AI technologies, they can potentially increase productivity, efficiency, and ultimately, drive growth and market returns.
In conclusion, the rise of generative AI is not just a trend, but a paradigm shift that new businesses need to embrace. The financial benefits, adaptability, and transformative impact of AI present a compelling case for new businesses to explore and integrate AI into their strategies.