Since the debut of OpenAI’s Chat GPT in 2022, industry leaders and governments worldwide have issued warnings of the potential dangers of artificial intelligence. While the tool could supercharge economic productivity, both sceptics and AI pioneers have warned of its potential dangers. However, it’s important to note that AI also holds immense potential for societal benefits. Now, the CEO of Berkshire Hathaway, Warren Buffet, has waded into the debate, comparing the technology to the atomic bomb.

Buffet made the comments at the recent Berkshire Hathway AGM of shareholders, where he said the technology had a tremendous capacity for good, but like the atomic bomb, it could, over time, develop into an existential threat. He said: 

“Used in a pro-social way, it’s got terrific benefits to society. But I don’t know how you make sure that happens any more than I know how to be sure that when you use two atomic bombs in World War II that you’d know you hadn’t created something that could destroy the world later.”

If AI and the atomic bomb share anything in common, it’s that, like any technology, the genie cannot be put back in the bottle. Goldman Sachs predicts AI technology is posed to replace or diminish 300 million jobs – while at the same time boosting global GDP by seven per cent. Clearly, AI represents challenges as well as opportunities. But which companies are set to benefit from AI, who will be the losers, and what risks does it pose?

Too gloomy over AI?

Buffet’s atomic bomb analogy was branded as ‘too negative’ by Georgetown professor Babak Zafari in comments to Business Insider. Speaking to the outlet, the professor said the better comparison was nuclear energy – a technology with upsides and downsides, but without the implied chance of Armageddon. Commenting, Zafari said:

“Like nuclear energy, AI offers benefits for efficiency and advancements in many areas, but it also brings substantial risks if not managed carefully.”

He added that redundancies created by the technology could be seen as an opportunity, reorienting workers toward creative industries and potentially boosting job satisfaction:

“This shift could lead to more fulfilling roles, potentially reshaping job descriptions to emphasise creative competencies and soft skills, thereby enhancing overall job satisfaction.”

However, even Elon Musk, a figure at the tip of the spear of AI technology, has repeatedly maintained that a scenario in which AI brings on an existential crisis is real. Speaking to Sky News last year, Mr Musk said AI was a “threat to humanity” that could “destroy civilisation.” It comes after the tech CEO issued a 2021 warning – perhaps half-jokingly – that AI could precipitate a future resembling James Cameron’s 1984 Terminator film.

 While that sort of outcome might seem farfetched – many experts agree – with dozens of figures from major tech firms, universities and NGOs putting their names to a dramatic statement put out by the Centre of AI safety. In May last year, the San Francisco-based nonprofit said battling the extinction risk posed by AI should be as much a concern as averting nuclear war. These doomsday scenarios could, the group said, include AI-generated misinformation destabilising societies or being called upon for the development of chemical weapons.

What benefits will AI bring?

Generative learning AI has transformed the business landscape in just a few short years. The technology offers a suite of benefits that can significantly enhance productivity and operational efficiency. AI’s capability to analyse vast datasets and extract actionable insights is enabling businesses to make informed decisions faster than ever, boosting productivity and delivering a competitive edge.

Data analysis is at the forefront of AI’s offer to businesses. AI algorithms can identify patterns and trends often missed by human analysts. Machine learning models, for instance, can predict market trends, customer preferences, and potential operational risks with remarkable accuracy.

 A report by McKinsey underscores that AI-driven predictive analytics can reduce forecasting errors by up to 50 per cent, a critical advantage for inventory management and supply chain optimisation.

Furthermore, AI-powered automation tools are revolutionising the handling of repetitive and mundane tasks. A system known as’ Robotic Process Automation’, can efficiently manage tasks such as data entry, invoice processing, and customer service inquiries. These systems operate with a high degree of accuracy and speed, which not only reduces operational costs but also minimises the risk of human error. Gartner predicts that by 2025, half of all business data will be processed autonomously by AI, significantly boosting productivity.

AI is also redefining customer service. Advanced AI systems, including chatbots and virtual assistants, provide instant and personalised responses to customer inquiries, handling multiple interactions simultaneously and ensuring consistent service quality. According to Salesforce, companies leveraging AI for customer service have reported a 25 per cent increase in customer satisfaction.

Innovation is another area where AI is making a profound impact. AI-driven insights enable companies to identify market gaps and innovate accordingly. In product design, for instance, AI can simulate performance and functionality, reducing the time and cost associated with prototyping. Accenture highlights that AI-led innovation has the potential to increase corporate profitability by an average of 38 per cent by 2035.

In the realm of human resources, AI is streamlining recruitment processes by scanning resumes and identifying top candidates, thereby significantly reducing the time spent on hiring. AI also facilitates personalised employee training programs, which adapt to individual learning styles and paces. A 2024 survey found AI was helping to slash the time spent recruiting, with almost 90 per cent of global companies taking advantage of the tech to help take on new workers.

The integration of AI into business operations is proving to be transformative. From enhanced decision-making and operational efficiency to improved customer experiences and innovation, AI enables businesses to allocate resources more effectively and focus on strategic growth areas. As AI technology continues to evolve, its role in driving productivity and innovation will undoubtedly become more pronounced, with some characterising the tech as the Fourth Industrial Revolution.

Which companies will benefit from AI?

Most companies are seeing their profits boom due to AI deals in hardware, software or both. Nvidia, a market leader in AI chips, has seen its share price soar by more than two thousand per cent over the past five years after the applications of its advanced AI chips in the industry became apparent. In April, the deVere Group CEO Nigel Green named the company among his top five companies set to benefit from AI, saying the stock could continue to do “extremely well” as AI capabilities advance even further in the coming years. Investors will keep a keen eye on the stock ahead of its earnings report on May 22.

Microsoft is spending significant sums on AI and is the biggest investor in OpenAI, known for its ChatGPT programme. In May, the company announced a €4 billion investment in AI infrastructure, skilling and tech acceleration in France – which came hot off the heels of a $2.2 billion AI investment in Malaysia and $2.9 billion toward AI and cloud infrastructure in Japan announced in April.

And this month, Apple threw its hat in the ring after years of lagging in the AI arms race with the announcement of the ‘M4’ chip. The new chip, which is debuting in the iPad Pro, is billed to be capable of 38 trillion operations a second, which is said to be a particular boost to users working with AI tools. It came as knowledge of Apple’s ‘project ACDC’ – a chip which would focus on running AI models – was leaked to the public, indicating the company was getting serious about catching up to its competitors.

But it’s not only companies directly making chips who are set to benefit. British-based semiconductor and software design firm Arm Holdings was said in the Morning Star to have a bright future ‘as part of the wider AI ecosystem.’ Equity analyst Javier Correonero, writing for the outlet, said while it might not grow as much as Nvidia, it should see success as a result of AI over the coming years:

“Firms like Synopsys (SNPS), Cadence (CDNS), or Arm have a bright future as tool supporters of the AI ecosystem, but we don’t expect they will benefit from AI to the same extent that Nvidia does…While Arm and other peers will gradually benefit from AI in the following years as ecosystem supporters, we expect their profits will grow more in line with revenue because they don’t have the same pricing power and operating leverage as Nvidia.”

Investors should also pay attention to Amazon, which is reportedly preparing to introduce ChatGPT-style functionality to its online store – after years of using the technology to help tailor product recommendations to its customers and in its fulfilment centres. Though the firm recently took a PR hit when it emerged its cashier-free stores were, in fact, remotely monitored by humans – the scope for Amazon to boost profits when it applies the full potential of AI technology to its vast stores of customer data should not be underestimated.

Will AI do more good than harm?

Whether AI will prove to do more good than harm is a question that only time will tell. But it is clear that technological advances are boosting productivity, profits and share prices for the companies behind it and in its orbit.

As AI continues to evolve, its transformative potential across various sectors—from enhancing productivity and operational efficiency to revolutionising customer service and driving innovation—is undeniable. However, the challenges and risks associated with AI, including job displacement and the possibility of existential threats, should not be dismissed. While Buffet’s comparison to the atom bomb might seem over the top – AI doesn’t appear to be threatening to literally blow up – he rightly makes the point that AI, like nuclear technology, harbours both immense benefits and significant dangers. Despite these risks, the benefits of AI are substantial. AI’s ability to analyse vast datasets and provide actionable insights is revolutionising decision-making processes and now looks set to be an immovable fixture of life and work going forward.