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The use cases for AI at companies are ‘exploding globally,’ says a Wedbush analyst

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Good morning. We’re at the beginning of what a top tech analyst considers “The Year of AI,” which will have a considerate impact on big companies. In a Monday note to investors, Wedbush Securities’ Dan Ives wrote that Wall Street’s new tech bull market has now begun, and that artificial intelligence is one of the drivers.

“The key to tech stocks and overall demand remain the use cases for AI that are exploding globally based on our recent enterprise survey work in the field,” wrote Ives. To find out more, I had a chat with him about the research, which Wedbush conducted along with GBK Collective through a survey of 672 companies.

“Many are planning to implement generative AI in 2024. And along with cybersecurity, it is the highest priority within IT budgets," Ives told me, adding that he expects generative AI will be eight to 10% of IT budgets this year, compared to less than 1% in 2023.

“The thing that stood out is that monetization appears a lot sooner than I think the Street’s anticipating,” he said.

The use cases will “lead to the pot of gold at the end of the rainbow,” according to Ives. For example, more than 50% of the companies surveyed see 20-plus use cases for generative AI, and over 80% see 10-plus use cases to improve business operations, such as data analysis, marketing content creation, and document editing/summarization. Creating a more cost-effective capital structure with the benefits of using generative AI is becoming increasingly clear, Ives said.

I've also heard about AI from CFOs, who recently shared their thoughts with me on how it will shape finance in 2024. Their predictions include that it will make processes more efficient and that it will creating new opportunities for strategic thinking. And along with becoming more strategic, the workforce of the future may be more creative, according to Matt Candy, global managing partner in generative AI at IBM.

Candy told Fortune in an interview that the jobs of the future will be filled by those who can work with AI using language and creative thinking. "Rather than us having to learn to talk the language of technology and programming computers, effectively they’re learning to talk our language,” he said.

From Wedbush’s discussions with companies about generative AI, Microsoft is perceived as currently “taking the clear lead in the AI arms race” among the Big Tech companies, Ives said. But Google isn’t far behind as it's being viewed by some CIOs as a major generative AI player down the road, he said. “We expect other technology companies such as Amazon, Meta, Nvidia, Apple, and other tech stalwarts along with smaller players in the industry to collectively spend billions in this AI arms race over the coming years,” according to Ives.

Sheryl Estrada
sheryl.estrada@fortune.com

This story was originally featured on Fortune.com

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