A few weeks ago I talked about the fact that only 15 companies in the S&P 500 are driving all of the S&P 500 returns this year. The other 485 companies are actually down year to date. Most of the 15 companies that are up this year are up because of the opportunities in artificial intelligence [A.I.]. There is no doubt that the opportunities for companies to increase profitability using A.I. is significant however, it's also important to look at which companies will be disrupted by A.I..

Below are some examples of how artificial intelligence will disrupt and transform how companies operate.

• Customer service and support; A.I. chat bots and virtual assistants can provide instant and personalized support 24/7.
• Data analysis and decision-making; A.I. can process vast amounts of data quickly and accurately. This allows machine learning algorithms to identify patterns and trends to help with decision-making processes.
• Supply chain optimization; by predicting patterns and improving inventory management A.I. can optimize logistics. A.I. algorithms can analyze historical data, market trends and external forecasts to forecast demand more accurately.
• Autonomous vehicles; some the most significant disruption will be caused by autonomous vehicles as they transform the transportation of people and goods. Imagine driving your autonomous car to work and then letting it become an autonomous Uber while you work at the office. Only to finish its shift at the same time that you finished yours so it can drive you home!
• Personalized responses. A.I. algorithms can understand individual preferences and behavioral patterns. At some point this will allow AI to respond to your emails, texts and phone calls automatically with an update sent to you with the decisions it's made. This could create some really interesting situations!

All of these illustrate how A.I. can disrupt companies by streamlining operations, improving decision-making and enhancing customer experiences. Most companies are embracing AI technologies because they don't want to fall behind. In the end some companies will either ignore A.I. or become redundant because of it. Our job is to make sure we recognize which ones. Remember when Kodak claimed digital photography would not catch on. I believe they went bankrupt a few years later!

I've also included a piece from our CIBC Economics Team entitled "Blame Canada".

As always, if you have any questions please feel free to give us a call at any time.

Have a great weekend.

Milan