Sharon Connolly @SharonConnolly: "My thoughts on the 'AI..."

Australia

My thoughts on the 'AI bubble' from a corporate perspective. What does the 'average' person know about AI? What do they think it does? What might they use it for? Who is spending the real money? The average person encounters clickbait videos, deepfakes, low-quality sales videos, and intrusive AI social media posts. Last night, I watched a news segment on how AI-generated music and AI downloads are undermining music download sites. But this is not where the money will be made. I have a day job. I'm a change manager. This means I help HUGE organisations move forward. This could be relocating 5000 people to a new office, embedding new regulatory rules into financial workflows, or using AI. I'm also a Microsoft MVP (Most Valuable Professional), which gives me access to what's coming in the Microsoft ecosystem. Most people's knowledge of AI is writing a catchy headline in Chat GPT. Here's how we see it in corporate. Major corporate applications such as JIRA ($TEAM), $CRM (Salesforce Inc), $SAP.DE (SAP SE) $ORCL (Oracle Corporation), $snow, $NOW (ServiceNow Inc) - now incorporate AI functionality into their applications. They may not charge customers for this functionality, but it adds value and reduces customer churn. Adding highly useful AI to products entails significant development overhead for these organisations, and we, as investors, should consider their processing power. More $NVDA (NVIDIA Corporation) chips, more $TSM (Taiwan Semiconductor Manufacturing Co Ltd - ADR) components. Many corporations are still in the early stages of AI adoption. They're in the early stages of setting up AI policies and educating staff. The tool they'll use is Copilot. They have M365, basic Copilot functionality is now included in Word, Excel, PowerPoint and Outlook. I don't see most companies spending the $400 a year to upgrade to the full licence for most people. I'd expect $MSFT (Microsoft) to fold and include it in more areas, perhaps only charging more for developers and SharePoint agents. Agents? Yes, the future is Agentic. I heard this frequently at the MVP conference at Microsoft HQ in Seattle last March. If you research how AI is used in AWS at $AMZN (Amazon.com Inc), the webpage opens with their agentic approach. In summary, the money in AI is not what we see in the media. We see the hype, the annoyance, the eye-rolling frustration or being bombarded with utter rubbish. But in the background, AI supports big business functionality. This is very different from the dotcom bubble. During the dotcom bubble, substantial sums were lost speculating on the next best thing that didn't materialise. The AI boom is established companies using technology to provide real value to their clients. Don't shy away from technology. Investigate the companies that support the companies pioneering AI - those who make the chips, those who make the components for the chips. The AI boom is probably not what you see. I see it differently. And, it's actually pretty different from how many companies write about it in their annual reports for shareholders.

Not investment advice. The author may have financial interests in the mentioned instruments.