Why AI Isn’t a Choice

Dear Reader,

There’s one question I ask myself when I consider if something is a megatrend or hype… Do companies have to adopt this tech?

The internet made having a web presence and, eventually, a social media page a necessity for nearly every corporation. Even 70% of small to mid-sized businesses have a digital presence. 

Smartphones keep people connected to their friends, families, and work all day. Over 86% of Americans own a smartphone. 

Even cloud computing is becoming cheap and easy enough that nearly every company uses it in some way… if they haven’t fully adopted it. Roughly 60% of companies store data on the cloud. And 94% use at least one cloud-based service. 

But not every trend sees these levels of mass adoption.

The metaverse, cryptocurrencies, and virtual reality were all supposed to be megatrends. While each has its use case, there’s no reason a majority of people or enterprises have to adopt these.

Today, a lot of people are questioning whether AI is a megatrend or just another hype bubble.

Without a doubt, AI is a real megatrend. Here’s why.

AI Achievers

Accenture, a global consulting company, conducted a survey of hundreds of companies.

It found that only 7% of those were considered AI “achievers.” Those were companies that had moved past just experimenting with AI and were using it to grow sales or cut costs.

These 7% were able to grow their revenue 50% more than their peers, on average.

That’s because AI also lets workers get more done.

The consulting company, McKinsey, found that AI improved output from several roles:

• Sales productivity increased by 3% to 5%.

• Marketing productivity increased by 5% to 15%.

• Companies saved 10% to 15% on R&D costs.

• Software engineering productivity increased by 20% to 45%.

• Customer service productivity increased by 30% to 45%.

For comparison, the U.S. Bureau of Labor Statistics estimates that worker productivity has increased by 2.1% per year since 1947. Since 2007, it’s dropped below a 1.4% increase per year. 

AI has the power to compress decades worth of productivity gains into a single year.

All told, McKinsey estimates that generative AI will create $2.6 to $4.4 trillion in value across 63 business use cases.

This increase in productivity and value is why nearly every company, big or small, will have to adopt AI in the coming years.

AI Adopters

The companies that stand to gain the most from AI are ones that lean heavily on knowledge workers.

That includes tech, finance, healthcare, education, and telecommunications.

Within the tech field, a recent survey found 92% of U.S.-based developers are using AI-powered coding tools at work.

Tools like GitHub’s AI Copilot makes writing code faster and easier.

A developer just tells Copilot what they want, and it spits out the code to do just that.

That allows developers to spend more time on designing a great website or app… rather than searching for the right lines of code. AI is going to enable people to be more creative.

In finance, AI would be able to easily digest thousands of line items to deliver insights.

In healthcare, AI can act in parallel to a doctor, nurses, and case workers, offering potential diagnoses, tracking treatment progress, and even assisting with follow-up care and billing.

The early adopters will see big gains in productivity, meaning higher revenue and reduced costs.

That all boils down to one thing – bigger profits for shareholders.

Within a couple years, shareholders will be demanding companies to adopt AI. That’s not happening yet.

We’re still early. Remember, just 7% of companies are using AI to deliver better results.

I’ve already shared two AI adopters, Adobe and Uber. You can read more about them here.

In the weeks ahead, I’ll be highlighting other early AI adopters that are set to beat expectations of Wall Street analysts that aren’t paying attention to their AI strategy.

Regards,

Colin Tedards
Editor, The Bleeding Edge