In all the market sound and fury around AI (artificial intelligence) in 2023 there seems to have been relatively little attention given to exactly what impact a rapid adoption of this technology might have.

The focus has largely been on the investment going into an AI arms race between the big technology firms, the development of generative AI for images and words and dystopian warnings suggesting we could see a repeat of the Skynet scenario in the Terminator films where the machines rise up against their human masters.

This hasn’t left much oxygen for the specifics around how different industries and sectors will be affected. However, that is beginning to change. One area where AI could lead transformative change with a global impact is in health care.

The UK recently allocated £13 million to investment in this area with hopes it can boost the speed and efficiency of research, enabling faster development of drugs as well as analysing test results and predicting the progression of different diseases.

We plan to look at the pharmaceutical industry’s efforts to incorporate AI into their projects and processes and the impact it might have on valuations and earnings in an article on the sector in the near future.

AI is being used for more everyday activities too and there was some interesting research published recently by Morgan Stanley on how it might transform the hotels sector.

The investment bank says AI can be a ‘game changer for the whole travel experience, from researching a trip to booking to engagement on property to continued engagement post-stay’. Adding that: ‘From an owner/operator standpoint, AI should also power more personalised experiences and lower costs given opportunities across hotels’ systems for more tech integration.’

Morgan Stanley highlights some tangible examples of how the technology can be applied including tailoring their service to specific customers by suggesting rooms and trips based on preferences implied by previous bookings and activity on social media, offering AI-powered virtual tours of rooms, automated check-in and AI integration into room features such as lighting and temperature control.

Yet as Morgan Stanley notes adoption is relatively low (it estimates just 8% of accommodation providers are making use of AI-powered business tools like chatbots and dynamic pricing algorithms). It says: ‘More than two-thirds (66%) do not yet have any plans to use AI in how they run their businesses, creating the possibility of technological disparity and a corresponding competitive advantage/disadvantage.’

This divergence in competitive advantage could become evident in other sectors and investors should start taking a closer look at what businesses are doing to harness the opportunities provided by AI and deal with any competitive threats it might pose in financial results and annual and interim reports. Failure to address these issues could easily see firms getting left behind.

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