The New Gold Mine for Investors: Generative AI

Gold has been considered a valuable metal throughout history, symbolizing economic security and prosperity. Just like gold mines promise wealth and value, Generative AI technology is creating significant opportunities in the business world, offering the potential for high returns to investors. Generative AI has been one of the most talked-about technological advancements in recent years. However, viewing it merely as a “trend” would be an understatement; on the contrary, this technology represents the first sprouts of a new era that will shape the future. It can be likened to the steam engines that transformed the world during the Industrial Revolution.

PitchBook reports indicate that Generative AI software spending will reach $17 billion in 2024 and $32.4 billion by 2025. For investors, these expenditures serve as an indicator of the sector’s interest and the scale of investment in the technology, demonstrating how much companies allocate to these technologies and the pace of their adoption.

The Rise of Investments: Why Generative AI is Shaping the Future

The world population is growing rapidly, leading to an increase in demand in areas ranging from basic sectors like food, health, transportation, and education to business. This surge in demand necessitates more efficient and sustainable solutions. At this point, generative AI steps in, offering increased productivity, personalized experiences, and sustainable practices.

Productivity Increase and Automation of Business Processes

Generative AI automates business processes, reducing operational burdens and enhancing productivity. This technology has integrated into our lives in various ways across different sectors:

• In the medical field, AI processes patient records, prepares reports automatically, and supports diagnosis, enhancing the speed and accuracy of healthcare services.
• In engineering, AI-powered solutions accelerate design and analysis processes, allowing engineers to solve complex problems more efficiently.
• In construction, AI-driven planning optimizations save time and costs while improving project efficiency and effectiveness.

Thanks to such automation, employees are freed from routine tasks, enabling them to focus more on strategic thinking and innovation. By redirecting human labor to more valuable work, this technology creates strategic transformations in the business world.

Personalized Experiences

Rapid advancements in technology have enabled businesses and service providers to offer personalized user experiences. This personalization is crucial for better meeting user expectations and providing tailored solutions. Personal experiences increase users’ loyalty to the brand, boost satisfaction levels, and improve the frequency of product or service usage. Personalized experiences are shaped based on data such as users’ preferences, past shopping behaviors, and interests, providing tailored services instead of generic solutions.

• In the Healthcare Sector: Generative AI stands out with its ability to prepare customized treatment plans based on patients’ medical histories and current health conditions. For example, AI-powered systems can diagnose diseases and recommend potential treatment methods, aiding doctors in their decision-making processes. This not only provides patients with faster and more accurate treatments but also personalizes treatment processes for more effective results.
• In E-Commerce: GenAI analyzes users’ past shopping data and browsing habits to offer personalized product recommendations. This technology automatically suggests products that users may like, personalizing the shopping experience and facilitating the purchasing process. Reports indicate that such features increase customer satisfaction and brand loyalty while boosting conversion rates.
• In Customer Services: AI-powered virtual assistants provide real-time, personalized responses to customer inquiries, enhancing the customer service experience. These assistants learn from customers’ past interactions and preferences, providing unique support for each customer. Reports suggest that such AI applications significantly improve customer satisfaction and increase efficiency in customer service operations.

Sustainability and Long-Term Solutions

Sustainability has evolved from being just an environmental goal to an economic and social necessity in today’s world. Generative AI (GenAI) technologies offer sustainable solutions in areas ranging from energy efficiency to agriculture, logistics, and food waste reduction, ensuring smarter use of resources and minimizing environmental impacts.

• Agricultural Technologies and Reducing Food Waste: Food waste poses a significant challenge for sustainability. Generative AI offers effective solutions in the agriculture sector, developing innovative technologies to reduce food waste. For instance, AI solutions like Wasteless optimize the pricing of perishable products in supermarkets, significantly reducing waste. Additionally, platforms like Nutrino contribute to more sustainable consumption habits by offering personalized nutrition recommendations.
• Autonomous Agriculture and Efficiency: Another contribution of Generative AI to the agriculture sector is autonomous farming technologies. Companies like Monarch Tractor develop AI-powered autonomous tractors, enhancing both environmental and economic sustainability in agriculture. These tractors not only reduce greenhouse gas emissions but also optimize resource use, ensuring more efficient production.

New Horizons of Generative AI: What Do Investors See?

The main factors investors consider when investing in technology include growth potential, innovation, long-term returns, and risk management. How does Generative AI (GenAI) meet these expectations?

Here are the key opportunities investors see in this technology:

• Scalability and Growth Potential: Generative AI offers a versatile technology adaptable to various sectors. Investors view its applicability in diverse areas such as healthcare, finance, retail, and entertainment as an indicator of its significant growth potential. The structure of GenAI, which enables startups to expand rapidly, fuels investors’ interest in scalable business models.
• Innovative Products and Services: Investors recognize the potential of Generative AI to create entirely new products and services. The technology’s ability to offer innovative solutions in areas like AI-powered content creation, automated software development, and data analytics is one of the attractive aspects of investing in technology. These innovations can change market dynamics, offering long-term profit opportunities.
• Competitive Advantage and Market Leadership: From an investor’s perspective, Generative AI is a technology that can provide a strategic advantage through early investment. Companies that enter this field early can secure leadership positions in the industry, gaining a competitive edge. Investors see supporting Generative AI as an opportunity to secure this advantage and establish a strong market presence.
• Cost and Efficiency Gains: Generative AI stands out with its ability to reduce operational costs and accelerate processes. Investors foresee that this technology will provide businesses with cost advantages in the long run. Technologies that reduce costs are always appealing investment opportunities, as they have a direct positive impact on profitability.
• Risk Management and Multiplication of Opportunities: Another critical factor for investors is risk management. Generative AI helps better manage risks and discover opportunities more quickly, thanks to its ability to analyze large amounts of data. This allows investors to make more informed and accurate decisions.

 

Future Implications of Investments in Artificial Intelligence

Investments in artificial intelligence are fundamentally transforming how businesses operate and professions function. The automation of traditional jobs directs employees towards more strategic and creative tasks. For instance, in customer service, AI-powered virtual assistants answer routine questions, allowing people to focus on more complex issues.

The PitchBook report highlights the potential of AI to reduce costs and increase efficiency in customer service and other sectors. For example, Klarna’s OpenAI-powered chatbot has generated $40 million in savings by performing the work of 700 full-time employees. This stands as a compelling example of the efficiency and cost-saving opportunities AI offers in the business world.

Similarly, the health insurance startup Clearcover has digitized the claims processing using AI, allowing claims to be settled in as little as 30 minutes. This solution enhanced customer satisfaction while reducing administrative costs.

The cost reductions and efficiency gains provided by current AI applications strengthen investors’ expectations for significant future returns. For example, Klarna’s OpenAI-powered chatbot’s $40 million savings by performing the tasks of 700 employees showcases the direct profit opportunities offered by this technology. Likewise, Clearcover’s acceleration of insurance processes and reduction of operational costs is another example of the net profit increases AI offers businesses.

Investors believe that these efficiency gains provided by AI will boost profitability in the short term and support sustainable growth as costs decrease further in the long term. Additionally, the rapid scalability of AI-powered business models allows investors to expect quick returns on their investments. Solutions like GenAI, which optimize operational processes while expanding profit margins, reinforce the expectation that investors will achieve higher profit rates in the future.

 

 

The Rise of Generative AI: Necessity or Opportunity for Companies?

We would like to illustrate this topic using examples from Spencer Johnson’s book, Who Moved My Cheese?.

 

 

In Who Moved My Cheese?, important lessons are given on how we should approach change. The book, through the cheese-seeking adventures of two mice, Sniff and Scurry, and two people, Hem and Haw, emphasizes the inevitability of change and how to adapt to it. In this context, Generative AI can be seen as representing companies that seize the opportunities AI offers, much like Sniff and Scurry, who adapt to change quickly and search for new sources of cheese. These companies can produce faster and more effective solutions, anticipate customer demands, and stand out in the market.

On the other hand, Hem and Haw represent companies struggling to accept change and clinging to old habits. Companies that ignore the opportunities brought by new technologies like Generative AI will fall behind in the market and lose their competitive edge. Especially in today’s fast-paced business world, where customer expectations change rapidly, companies that fail to adapt to these changes face the inevitable risk of collapse.

 

The rise of Generative AI is not a necessity for companies but rather an opportunity to adapt to changing conditions. Companies that embrace and integrate this technology into their strategies gain a competitive edge, while those who ignore it will face a future full of threats. Change is inevitable; what matters is how one adapts to it.