Companies Quantifying Revenue and Cost Benefits of Generative AI, According to Morgan Stanley
Analysts at Morgan Stanley have identified numerous companies that have quantified the financial gains from implementing generative artificial intelligence (AI). In their analysis of first-half results announcements and earnings calls since July 1, the bank highlighted that 29 companies have quantified the revenue opportunity, while 36 companies have quantified a cost or productivity gain. This data was shared in a note to investors on August 14.
Morgan Stanley’s list includes not only tech giants like Alphabet, Meta, and Microsoft, but also non-tech firms that are benefiting financially from generative AI. These companies span various industries, such as energy, industrials, and healthcare. Energy companies are utilizing generative AI to expedite material discovery, while industrials companies are employing it to manage equipment failures. Additionally, healthcare companies are leveraging generative AI to accelerate drug discovery.
Revenue and Cost Benefits of Generative AI by Reporting Companies
The note from Morgan Stanley highlights the following statements from reporting companies regarding the financial impact of using AI or generative AI:
Alphabet:
“Our new generative AI offerings are expanding our total addressable market and winning new customers. We are seeing strong demand for the more than 80 models, including third-party and popular open source in our Vertex, Search and conversational AI platforms with the number of customers growing more than 15x from April to June.”
Meta:
“AI recommended content from accounts you don’t follow is now the fastest growing category of content on Facebook’s feed, [which has] driven a 7% increase in overall time spent on the platform.”
Microsoft:
“More than 11,000 customers use our Azure OpenAI Service, with nearly 100 customers added every day in our most recent quarter. More than 1 million organizations now count on our comprehensive AI-powered solutions… up 26% year-over-year.”
Intesa Sanpaolo:
The Italian bank Intesa Sanpaolo expects the number of use cases for AI to increase from 35 to 140 in the next couple of years, generating €0.5 billion ($0.54 billion) in gross income.
Ceridian HCM:
This HR software company reports that its generative AI tool is answering 85% of customer questions, resulting in a 10% gain in overall productivity in customer support.
VAT Group:
The Swiss company that manufactures valves for semiconductors anticipates a compound annual growth rate (CAGR) of 32% in AI-related revenue over five years.
AstraZeneca:
The pharmaceutical company AstraZeneca states that AI has accelerated drug development, reducing in-route synthesis lead times from 9-12 months to 5-6 months, with a goal of further reducing lead times to under 3 months.
Comstock:
Energy and materials company Comstock highlights that AI has significantly reduced the time and cost associated with determining the best materials for certain projects, cutting the process from 10 years and $10-100 million down to less than a day and less than $10,000.
Vertiv:
Vertiv, a provider of services to data centers, has received AI-related orders worth tens of millions of dollars.
Bruker:
Life science company Bruker estimates that approximately $75 million of its 2023 revenue will be driven by AI trends, with expectations of continued growth.
Morgan Stanley concludes that AI-based technologies have the potential to enhance productivity and coincide with periods of strong market returns. The bank noted 47 quotes from management teams in the second quarter of 2023 that highlighted productivity gains and efficiency in employee training.
