In a fascinating trend, a significant portion of the business sector contributing nearly half to the US economy is showing increased interest in artificial intelligence (AI). This shift coincides with a surge in the valuations of AI-associated stocks, which have seen an injection of hundreds of billions of dollars on Wall Street.
“Small businesses have caught the AI bug,” states American Express, describing findings from a recent survey of 550 small business leaders. The study unveils a rising curiosity among small businesses towards harnessing the potential of AI.
Conducted in March, the survey revealed that 41% of small businesses are prioritizing AI to facilitate decision-making. Additionally, 39% of respondents identified time-saving as their primary motivation for employing AI tools, while 20% are aiming to enhance customer service efficiency.
Interestingly, the survey also identified a generational divide in AI adoption. Among businesses led by Gen-Zers and Millennials, 56% are prioritizing AI, regardless of their size. This contrasts starkly with the 24% figure among older generations.
These insights emerge amidst a Wall Street investment frenzy sparked by the introduction of the natural-language chatbot, ChatGPT, last year.
Increased demand for AI products and promising prospects for the technology have led to a massive influx of investment into companies like chipmaker Nvidia. Nvidia’s stock has seen a whopping 159% surge in 2023, with its market capitalization leaping by $248 billion in May alone. This has propelled Nvidia into the elite club of companies boasting a valuation of $1 trillion or more.
Likewise, other tech giants with AI tools have also witnessed their market caps jump. Last month, Google parent Alphabet and OpenAI investor Microsoft saw their valuations surge by $195 billion and $157 billion, respectively.
However, with AI stocks soaring to unprecedented levels, some Wall Street analysts are urging caution, suggesting it’s time to minimize risk and bank some profits.
Michael Landsberg, Chief Investment Officer at Landsberg Bennett Private Wealth Management, expressed his concerns. “Given the meteoric rise of AI-related stocks, we plan on trimming a substantial portion of our profits in these stocks over the coming weeks. The rapid inflation of market caps by hundreds of billions of dollars is a bit disconcerting, particularly as the monetization strategies of these AI firms remain somewhat nebulous.”