Artificial intelligence is going to multiply corporate profits, yet not in the way most economists are currently predicting. And it’s now time for investors to buy Amazon.com (AMZN) shares, elucidates Jon Markman, editor at Weiss Ratings Daily.
Executives at Amazon announced recently the demolition of nine Virginia office towers. The online retailer will ultimately use the space to build new, state-of-the-art data centers. Let me explain why this matters.
Blue-collar America has been under siege for decades. Automation, then offshoring, gutted domestic manufacturing payrolls. At its peak in 1979, the manufacturing sector accounted for 22% of all American jobs, according to data from the Bureau of Labor Statistics. In 2020, the National Association of Manufacturers noted that number shrank to only 8.6%.
But it’s not all bad. The average manufacturing worker in the 1960s produced approximately $40,000 of output annually. Yearly output per worker today is above $200,000 and rising. Operations that used to require teams of workers are now completed by two or three people with computers and robots.
Doing more with less is what economists call productivity, the great wealth creator. AI is now bringing the productivity to knowledge work
McKinsey, the global business consulting firm, studied 63 AI use cases across 16 business functions. Researchers concluded that AI’s total economic impact could be between $7.1 trillion and $26.5 trillion, and that the biggest beneficiaries would be sales, marketing, and software engineering.
It makes sense. Intelligent AI chatbots are indistinguishable from humans. The software even seems to think like humans, drawing logical conclusions and solving problems rationally. This makes AI chatbots the perfect tool to streamline customer support operations.
AI software engineering will be a game-changer, too.
ChatGPT is best known for generating convincing responses to user prompts. However, the software platform, and a growing list of others, is capable of writing working software code from nothing more than a natural language prompt. Type what you want the code to do in plain English, and the chatbot spits out the code, ready to use.
Amazon.com demolishing office towers to build data centers makes so much sense. The future of the Seattle-based company is in data centers, not office towers.
Amazon.com is in a perfect position. Its mammoth online retail business is ripe for AI chatbot deployment. And its white-collar operations, including the AWS cloud services business, will benefit from software generative AI.
Recommended Action: Conduct your own due diligence, but investors should use weakness to buy AMZN.