Generative AI is miracle technology for profit-hungry CEOs: PwC survey – Yahoo Canada Finance

Step aside, CFOs: New generative AI technology stands to supplant you as your CEO's best friend.
This, in part, reflects how the latest crop of powerful tech can unlock major impact on worker productivity and corporate financials, according to a new study of CEOs by consultancy PwC. The survey was released ahead of an AI-themed World Economic Forum kicking off on Tuesday in Davos, Switzerland.
About 68% of US CEOs surveyed say that the next 12 months will see generative AI increasing the amount of work that employees can accomplish. That number is 64% globally, according to PwC. Roughly half of US CEOs expect the technology to help them become more productive in their own work.
The productivity boost should serve up a jolt to profits, CEOs contend.
Nearly 44% of the CEOs questioned say they see generative AI providing a net increase in profits in the next 12 months, versus just 3% anticipating a net decrease.
"Investors are also increasingly demanding executives pursue profitable growth, prompting many CEOs to turn not only to cost containment strategies, but also to GenAI," explained PwC. "What’s alluring about GenAI is its dual ability to produce efficiency gains that hold down current expenses while simultaneously enabling company reinvention. This may mean that, when the macroeconomic headwinds abate, the stage is set for a potentially faster rate of growth on a lower cost basis."
PwC adds that 2024 is shaping up to be the year of "business model reinvention."
Prior research from PwC puts a bow on the broader generative AI economic impact.
AI could contribute up to $15.7 trillion to the global economy in 2030, more than the current output of China and India combined.
The greatest economic gains from generative AI, says PwC, will be in China (an approximate 26% boost to GDP in 2030) and North America (a roughly 14.5% GDP jolt).
To be sure, investors have been positioning to capture any major upside in profit increases.
Stock indexes such as the S&P 500 (^GSPC), Dow Jones Industrial Average (^DJI), and Nasdaq Composite (^IXIC) continue to hover around record highs in 2024. Large-cap tech companies with outsized AI exposure, such as Microsoft, Alphabet, and Amazon, remain top picks amongst Wall Street analysts.
And the share price of generative AI chip giant — and market darling — Nvidia has pushed to fresh records in 2024's early going.
In total, Wall Street currently expects S&P 500 profits to grow an impressive 11% in 2024 as new AI tools proliferate and inflation cools. Last year, S&P 500 profits grew about 3% as companies invested aggressively in the first tranche of generative AI and dealt with lingering inflation.
"The potential rewards from large and transformative impacts of GenAI still outweigh the rising investor expectations implied by solid CY23 stock performance," said Morgan Stanley analyst Keith Weiss in a client note seen by Yahoo Finance. "On the balance, we are just getting started."
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