Bank of America: AI Poised to Disrupt Every Sector

Artificial intelligence (AI) is predicted to have a significant economic impact, potentially reaching $15.7 trillion by the end of the decade, according to Bank of America.

This emerging technology is expected to touch all facets of the global economy and drive economic growth, Bank of America analysts, led by Alkesh Shah, stated in an investor note, Seeking Alpha reported Wednesday (Oct. 11).

Corporate AI implementation could boost operating margins by 250 basis points, equivalent to approximately $65 billion in cost savings, over the next five years, according to the report.

The analysts highlighted the rapid growth of AI applications, citing the example of ChatGPT, which reached 100 million users in just two months, the report said. This milestone was achieved faster than popular social media platforms like TikTok, Instagram and Twitter.

The analysts emphasized that AI is still in its early stages, with newer foundation models considered “immature” and applications only just beginning, per the report. As a result, the investment in AI has the potential to disrupt every sector over the next five to 10 years.

Bank of America also noted that companies are expected to integrate generative AI tools into their processes in the coming years, further enhancing efficiencies and boosting revenue, according to the report. This could be achieved by differentiating themselves from competitors or implementing “AI upgrade fees,” similar to what Microsoft and Google have done with their respective AI products, Copilot and Duet.

The analysts believe that generative AI will have a global impact on every sector, leading to increased efficiencies and incremental revenue, the release said. They suggest that the upside potential of AI is unlikely to be fully priced in at this stage.

An August report by Goldman Sachs Economics Research also predicted that AI will have a wide-ranging economic impact. It added that investment in AI could approach $200 billion by 2025.

“Innovations in electricity and personal computers unleashed investment booms of as much as 2% of U.S. GDP as the technologies were adopted into the broader economy,” Goldman Sachs Economics Research said in an Aug. 1 report. “Now, investment in artificial intelligence is ramping up quickly and could eventually have an even bigger impact on GDP.”

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