In the coming years, nearly a trillion dollars is expected to be invested in generative artificial intelligence, but is it worth it?
To understand where the industry is headed, Brook Dane and Sung Cho, portfolio managers from Goldman Sachs Asset Management’s Fundamental Equity team, met with executives from 20 leading technology companies driving innovation in artificial intelligence.
There are risks. Only a handful of companies can compete in the development of large-scale, general-purpose language models. It could become a market where the winner takes all, with significant losses for companies that fall behind, even after massive investment. The applications that justify the enormous amount of spending have yet to fully emerge. For now, AI competition is largely concentrated among a few large companies with substantial resources.
However, the team sees signs that industry-specific and vertical models may emerge, leading to a broader range of winners in the AI arms race. Conversations with leading tech companies indicate that some executives are already seeing a return on their AI hardware investments. And a new generation of products from chip manufacturers is beginning to enter the market, which could mean a wider range of beneficiaries in the semiconductor industry from the AI wave.
