The article discusses the potential profitability of the current AI wave compared to previous technology waves. According to a report by Goldman Sachs, the AI wave is expected to generate lower profit margins for companies by 2024 than previous tech waves like the internet and mobile revolutions. The report suggests that AI will likely be a “deflationary force” due to increased competition and commoditization of AI capabilities. Key points include: 1) AI is expected to boost productivity and lower costs, but also intensify competition and compress margins. 2) AI adoption is happening faster than previous tech waves, leading to quicker commoditization. 3) Large tech companies may benefit more from AI than smaller firms due to their resources and data advantages. 4) Sectors like healthcare, finance, and transportation could see the biggest AI-driven productivity gains. The report concludes that while AI will create economic value, companies may struggle to capture a significant portion of those gains as profits.
Source: https://www.businessinsider.com/ai-less-profitable-than-previous-tech-waves-2024-8