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Key points:
AI sector forecast to reach US$5 trillion by 2033 Value lies in ASX firms using AI pragmatically, like Seven West Media (ASX:SWM) and Humm Group (ASX:HUM) Seven West Media leverages AI for marketing and audience targeting Humm Group uses AI to drive operational efficiency and cost reduction
Rob Hay from Collins St Asset Management is observing significant opportunities in artificial intelligence, describing it as potentially the most transformative development since electricity or fire. Hay notes projections for the AI sector to expand 25-fold by 2033, evolving into a US$5 trillion industry. He suggests the current phase marks only the beginning of what he refers to as a new industrial revolution, particularly with the emergence of various AI subsectors such as data centres and semiconductors.
Hay advocates seeking value investment opportunities on the ASX, preferring companies utilising AI to optimise business models rather than speculating on high-growth mega-cap tech stocks. Highlighting specific examples, Hay points to Seven West Media (ASX:SWM), which leverages AI through its 7plus app to enhance data-driven targeting and audience engagement. He also mentions Humm Group (ASX:HUM), which employs AI for operational efficiencies, including an AI assistant that handles around 50% of customer queries, leading to substantial cost savings and improved customer experience.
Cautioning against excessive enthusiasm, Hay underlines the importance of recognising risks such as regulatory challenges and algorithmic biases. Hay emphasises the strategic role of AI as both a growth engine and a cost reducer, but notes investors should remain aware of potential pitfalls and regulatory counterforces.
