AI Buries Old-Economy Stocks: One Company to Watch Out For
The impact of new technologies on industries and jobs is not new. The introduction of Henry Ford's tractor in 1917 led to widespread job losses among farmers, forcing some to move to other regions for work.
A similar story is unfolding with artificial intelligence (AI). As AI technology advances, it will bring significant efficiency gains but also eliminate certain categories of employment. Companies must adopt and integrate AI technologies quickly or risk being left behind.
The last great technology gold rush was the internet in the late 1990s. Telecom companies invested heavily in laying fiber-optic networks, anticipating a surge in demand for bandwidth. However, this demand took longer to materialize than expected, leading to a massive infrastructure surplus and financial losses for many companies.
Companies like Netflix, Alphabet, and Amazon built successful businesses on top of the existing communications infrastructure. Those that failed to adapt were left behind. Similarly, AI will create new opportunities and challenges for companies.
The author identifies Shutterstock as a company that has not adapted effectively to the changing landscape. The company's core business model is being threatened by GenAI technologies like OpenArt, leading to declining revenue and net income.