CFOs, step aside. New generative AI technology stands to replace you as the CEO’s best friend.
A new survey of CEOs by consulting firm PwC says this partly reflects the potential for new, powerful technology to have a huge impact on employee productivity and company finances. The study was released ahead of the World Economic Forum on AI, which opens in Davos, Switzerland, on Tuesday.
Approximately 68% of US CEOs surveyed say that generative AI will increase the amount of work their employees can accomplish over the next 12 months. According to PwC, this number is 64% of the global total.Almost half of US CEOs expect technology to help them they Increase your productivity at work.
CEOs argue that productivity gains should have a big impact on profits.
Almost 44% of CEOs questioned said generative AI would result in a net increase in profits over the next 12 months, compared to just 3% who expected a net decrease.
“Investors are also increasingly demanding that management teams pursue profitable growth, with many CEOs turning to GenAI as well as cost containment strategies,” PwC explains. did. “GenAI is attractive because of its dual ability to reduce recurring expenses while generating efficiency gains that enable companies to reinvent themselves, at lower costs once macroeconomic headwinds subside. It may mean that we are better positioned to potentially achieve higher growth rates.''Basically. “
PwC added that 2024 is shaping up to be the year of “reinventing business models.”
Previous research by PwC has revealed the economic impact of widespread generative AI.
AI could contribute up to $15.7 trillion to the global economy in 2030, more than the current output of China and India combined.
According to PwC, the biggest economic benefits from generative AI will be in China (upping GDP by about 26% in 2030) and North America (upping GDP by about 14.5%).
To be sure, investors are looking to capture big upside in earnings growth.
Stock indexes such as the S&P 500 (^GSPC), Dow Jones Industrial Average (^DJI), and Nasdaq Composite Index (^IXIC) will continue to hover near all-time highs in 2024. Microsoft, Alphabet and Amazon remain top-ranked among Wall Street analysts.
And the stock price of Nvidia, the generative AI chip giant and market darling, hit a new record in early 2024.
Wall Street now expects S&P 500 profits to grow a whopping 11% in 2024 as new AI tools take off and inflation slows. Last year, S&P 500 index profits rose about 3% as companies aggressively invested in the first tranche of generative AI and combated lingering inflation.
“The potential benefits of GenAI's large-scale, transformative impact continue to be driven by strong stock performance in 2023,” Morgan Stanley analyst Keith Weiss said in a note to clients seen by Yahoo Finance. “This has exceeded the expectations of investors,” he said. “Overall, we are just getting started.”
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