Two reflections arise. First, although the commercialisation of artificial intelligence (AI) is uncertain as to timing and magnitude, it is already possible to draw reasonable conclusions about what types of companies are best positioned to benefit.
They will be companies that own or create large amounts of proprietary data about the industry in which they operate. AI tools can be set to work on this data to generate new insights and new efficiencies. This is why it is said in the 21st century: “Data is the new oil”.
An accounting software company such as Sage is certainly in a position to study the reams of transactions that take place on its platform and is already creating new value from them.
Next, if I am right about this, the London stock market is not as disadvantaged as its disappointing recent performance suggests. Specifically, there are a number of major British companies that create or organise valuable data.
For instance, among the FTSE 100’s top 20 companies, you could readily argue that the two drug companies AstraZeneca and GSK, and the globally significant data aggregators, RELX, London Stock Exchange and Experian, all have opportunities to make money out of data that is unavailable to any other company but themselves.
There are several others in the lower reaches of the FTSE All Share index too, but I won’t mention them by name because we might be buying them. When investors think about the likely beneficiaries of AI, their minds probably go straight to Silicon Valley – and with good reason.
