Tech Giants Gained $2.4 Trillion from Artificial Intelligence (AI) in 2023 | Coinspeaker

Tech Giants Gained $2.4 Trillion from Artificial Intelligence (AI) in 2023

UTC by Tolu Ajiboye · 3 min read
Tech Giants Gained $2.4 Trillion from Artificial Intelligence (AI) in 2023
Photo: Depositphotos

A new report notes that AI has brought trillions in good fortune to tech giants in the United States, like Microsoft, Apple, and Amazon.

The ongoing AI explosion has benefited several tech companies in the US, adding trillions to their market capitalizations in a year. According to a venture capital firm Accel report, AI has helped US tech giants increase their valuations by $2.4 trillion.

Tech Giants Enjoy AI Boom

Accel published its annual Euroscape Report, noting the benefits tech companies derived from AI use. According to the report, several major companies, including Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Nvidia Corporation (NASDAQ: NVDA), and Amazon.com Inc (NASDAQ: AMZN) rose 36% in the past year, adding $2.4 trillion. The report also highlights Nvidia’s entrance into the $1 trillion market cap club. According to MarketWatch data, Nvidia is currently worth $1.12 trillion.

Nvidia has been one of the biggest beneficiaries of the ongoing AI boom. The company is currently enjoying a heavy surge in demand and recently predicted that its revenue for the quarter would hit $16 billion, a 170% jump. The company also posted impressive numbers for fiscal Q2 2024. Nvidia announced revenue of $13.51 billion, an 88% increase from the previous quarter and 100% up from the same period a year earlier. The figure is also more than the $11.22 billion expected by analysts surveyed by Refinitiv. In addition, Nvidia reported earnings per share of $2.7, much higher than Refinitiv analysts’ $2.09. Morgan Stanley analysts have said that Nvidia would benefit significantly from the ‘massive shift’ in AI.

Accel’s report also notes other benefits brought by the AI boom. For instance, the report states that it took NASDAQ only 18 months to return to 80% of its all-time high. The team notes that following the financial crisis of 2000, the same milestone took 14 years.

Furthermore, cloud giants like Oracle Corporation and Adobe Inc rose by 75%, with significant increases recorded in Salesforce and SAP SE. Overall, these cloud companies added $1 trillion to their market caps and climbed about 40% in the past year.

AI Products and a ‘Reality Check’ Prediction

Since OpenAI launched ChatGPT, several tech giants have designed or are developing similar AI tools. Swedish fintech startup Klarna recently announced an image recognition tool that helps users identify goods for purchase. Users can get information about desired items by pointing their phones at the products.

Also, Microsoft introduced several AI products aimed at healthcare. Including the Azure AI Health Bot, these tools help patients and healthcare staff improve the effectiveness and general delivery of healthcare.

Although most AI forecasts are bullish, some analysts predict a reality check next year. According to leading tech research firm CCS Insight, the interest and hype AI is currently enjoying will be replaced by practical challenges. CCS Insight believes that the cost and risk of AI would become more pronounced. According to the firm’s Chief Analyst, while AI will help increase productivity levels, problems like the cost of running applications using Graphics Processing Units (GPUs) and concerns like ethical problems and job displacements might become significant issues in 2024.

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