AI helping companies make more money, adding up to 20% to profits: report


While AI has been a driving force in the technology sector, its return on investment beyond deployment is a major concern amongst experts.

Building a profitable AI driven economy requires a strong hold of redesign tactics, adapting to changes in the working processes and optimal use of business diagnostics, a report by Bain’s Technology mentioned.

While we acknowledge the transformative power of AI, its impact on business opportunities, industry structure, revenue and resources also needs to be discussed.

AI is Changing the Game

Data reveals disruption rates are higher in technology than in other sectors, with nearly half of the 25 most valuable tech companies falling out of the top ranks every 10 years .In 2024, AI has been the forerunner of the technological shift and companies are spending massively on AI such as cloud services. It not only increases efficiency but also ensure organized functionality and operations.

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But at the same time, just having access to AI isn’t enough, businesses have to re-think to finally gain value from it.

Big-tech companies like Microsoft partnered with OpenAI and integrated advanced AI into products like Azure and Office while the chip making giant Nvidia saw the potential in AI powered gaming GPUs.

The companies are finding ways to adapt to the technological advancements and capture market value. It’s high time the startups realise AI can increase the revenue, sometimes adding up to 20% to their profits.

Changes and Disruptions in Tech

Disruption in the technology sector has not slowed down, but turnover among the top companies has, the report cited. Four of the top five most valuable technology companies in 2024 were among the top tech companies in 2019, and three of the five were on the list in 2009—Microsoft, Apple, and Alphabet, which was then Google.

There are cases where AI deployment has helped companies to focus on data-driven insights and manage products, improving traditional areas for enhanced productivity.

Intuit is an example for this change. The financial technology platform for both consumers and small businesses has integrated GenAI technology and tools to increase end-to-end development velocity throughout the company’s software development life cycle.

Investments in Technology

The market for AI products and services could reach between $780 billion and $990 billion by 2027 to which the big cloud providers are the largest concentration of R&D, talent, and innovation today, pushing the boundaries of large models and advanced infrastructure.

On investments, Nvidia’s CEO, Jensen Huang, discussed the potential in the company’s Q3 2024 earnings call. “Generative AI is the largest TAM expansion of software and hardware that we’ve seen in several decades.”

Therefore, for AI to work for the benefit of all, companies need to update their systems and data as well as identify key areas for investments in AI. The AI industry is growing fast and is predicted to be worth almost $1 trillion in revenue by 2027, fueled by improvements from cloud providers and smaller companies.



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