How will Microsoft, Intuit, Meta, Oracle, Eli Lilly benefit from AI?
Artificial intelligence has arrived at an opportune time and could help investments by certain types of companies. That's how. In-depth analysis by Justin Streeter, Manager of Comgest's Comgest Growth America fund
Recently, news surrounding artificial intelligence (AI) has ranged from studies that release alarming statistics (Goldman Sachs recently declared that AI could lead to the loss of 300 million jobs) to sentiments that border on alarmism. hyperbolic (“AI will take over humanity”).
However, a look at the past tells us that “epochal changes” such as the industrial revolution or the rise of the Internet have created similar fears, yet civilization has not imploded. Instead, humans have used these developments to improve their original processes, and the world has become more efficient as a result. AI will present challenges, but there is no reason to mobilize a Luddite revolution against it.
The reflection we should make, as investors, concerns the immense opportunities that this technology is creating. First, in a time when global GDP growth is under increased pressure due to demographic trends, debt levels, resource scarcity, climate concerns and more, productivity has become the growth and prosperity. In this sense, AI has arrived at an opportune time and could facilitate investments by certain types of companies.
Let's take the example of “virtual assistants”, such as Microsoft's “Copilot” , which will be integrated into Microsoft 365 and Azure. This technology can speed up processes and reduce costs at the same time, giving entrepreneurs more time and money to invest in other areas of their business. In fact, developers using Microsoft's GitHub Copilot are 55% more productive on tasks.
This way it is possible to democratize tools that were previously only available to large companies. For example, Intuit has been using artificial intelligence for several years to give small business customers a better understanding of their finances. As a result, 69% of these customers stay in business for 5 years, compared to approximately 50% of small businesses in the United States . Additionally, the deepening of generative AI should make it even easier for entrepreneurs with fewer resources to start and run a business, generate personalized marketing content, and reach new customers.
Credit Karma, Intuit's consumer-facing brand, is also leveraging its AI analytics to “guarantee” credit card approvals for its users, with an average approval rate about double for members applying for credit cards. credit on Credit Karma compared to those who do not use the platform4.
On a lighter note, Meta (Facebook) is launching artificial intelligence tools such as virtual assistants, photo editing and emoji creation, to allow its users a more fun and personalized interaction on its platform. Meta differentiates itself from other tech leaders because it believes mass adoption (Meta has 3.6 billion users) will come through multiple, customized AI models (one for sports, one for travel, one for business family members…), rather than a universal model. Meta has hired prominent celebrities to lead this launch with their avatars.
Artificial intelligence is also bringing improvements in healthcare, which is one of the most inefficient sectors in the United States (healthcare spending represented more than 18% of the national GDP in 2022). One of the main reasons is the lack of a national database, which leads to manual entry of a lot of data and therefore many errors. These errors can lead to misdiagnoses, longer hospital stays and excessive spending, which in turn divert resources from vital care.
Several companies are currently working to improve data organization nationwide. Microsoft recently acquired Nuance , a leader in conversational AI technology, for $20 billion in 2021. Nuance uses artificial intelligence to compile patient documentation, freeing up doctors' valuable time for follow-up and allowing more resources to be dedicated to other areas.
Oracle is also investing, for example with the acquisition of Cerner, a leader in electronic health records, for $28 billion in 2021 . This acquisition is part of Oracle's goal to build a national health database complemented by powerful artificial intelligence tools. This will help improve diagnoses and have an impact on spending, hospital stays and waiting lists.
In the pharmaceutical sector, artificial intelligence is accelerating drug development at the discovery stage by predicting which proteins and molecules would be suitable for certain disorders. Eli Lilly is one company that has already moved to take advantage of this and recently entered into a $425 million partnership with Schrödinger , a biotech that provides a software technology platform powered by artificial intelligence. By providing drug testers with a more solid starting point when it comes to protein structures, AI technology could dramatically speed up the drug development process, leading to numerous improvements in treatments at a speed never seen before. This will have the effect of making the healthcare industry even more efficient, making more life-saving drugs available.
In summary, we must not forget that AI, like many other development tools, comes with its own set of challenges. For example, it will require greater investment in cybersecurity, data centres, electricity, education and regulation to recognize and reduce misleading and untruthful content. Nonetheless, the sensible approach to AI advances is to maintain a positive mindset. While AI is a disruptor for the future, it also represents a way for developed economies to maintain higher levels of growth than they would otherwise have been able to achieve. Not only that, it also offers opportunities for technology companies and many other types of businesses that can leverage the potential of AI to make their products and services more efficient.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/come-beneficeranno-microsoft-intuit-meta-oracle-eli-lilly-dellia/ on Sun, 19 Nov 2023 07:02:23 +0000.