TL;DR:
- PayPal and IBM are adopting artificial intelligence (AI) strategies to appeal to investors.
- PayPal’s AI strategy aims to lower costs and provide a unique set of value propositions for merchants and consumers.
- The use of AI is increasing in the tech industry, with mentions of “AI” up 64% year-over-year in earnings calls.
- Different companies have different use cases for AI, from selling it as a product to other businesses to powering it with services and hardware.
- The impact of AI on stocks has varied, with IBM and PayPal’s stocks taking a hit in the short term.
- AI is expected to have a significant impact on business operations, with the potential to improve efficiency and reduce costs.
Main AI News:
In the current earnings season, companies are embracing artificial intelligence (AI) strategies to attract investors, with PayPal and IBM being the latest to join the bandwagon. According to PayPal CEO Dan Schulman, A.I. will enable the company to operate more efficiently, which will lead to significant cost savings in the long run. Schulman also added that AI, when combined with PayPal’s unique scale and sets of data, will provide a unique set of value propositions for both merchants and consumers.
However, while the AI buzz has been on the rise, it has not necessarily translated into positive stock returns for all companies. IBM shares are down since the announcement that the technology could replace nearly 8,000 of the company’s jobs, and PayPal’s stock fell more than 10% amid concerns over its outlook for margin growth. Despite this, mentions of “AI” are up 64% year-over-year in earnings calls, according to Bank of America research, and the use cases vary across companies.
For instance, Alphabet’s Google and Microsoft plan to sell AI as a product to other businesses. On the other hand, companies like Nvidia are powering AI with services and hardware, which has led to a significant increase in its stock amid the AI boom.
PayPal’s AI pitch is timely, given the current moment in the tech industry, where layoffs are mounting, and the industry’s largest players like Meta Platforms are touting a “Year of Efficiency.” Schulman believes that AI will impact almost every function inside PayPal, from the front office, back office, marketing, legal, engineering, and more. He added that AI will not only lower costs but also improve performance and enable the company to do things better.
Conlcusion:
The increasing adoption of AI strategies by companies like PayPal and IBM suggests that AI is becoming a critical component of business operations. While the impact on stock prices has been mixed, the use cases for AI vary across industries and businesses, providing opportunities for growth and innovation.
As companies continue to explore the potential benefits of AI, it is likely that we will see an increase in its use across different sectors of the market. As such, businesses that are slow to adopt AI may find themselves at a disadvantage in an increasingly competitive landscape.
