Synthetic intelligence blew up the markets in 2023. And Nvidia marked the center of the AI growth, hovering over 200% final 12 months. The “Magnificent Seven” tech shares drove a lot of the positive aspects of the S & P 500, which rallied about 24% after a dismal 2022. “The obvious beneficiaries of the generative AI revolution have already seen an expanded development of their market cap in 2023, however there are potential alternatives as we enter the following phases of the buildout,” Citi mentioned in a 2024 wealth outlook report it not too long ago launched. The financial institution mentioned it is “most definitely, not too late” for traders to take part within the “exponential development” of AI know-how. “Final 12 months was concerning the apparent ones. Huge firms, massive free money movement era can fund the innovation, the infrastructure – sort of true know-how performs,” mentioned Kristen Bitterly, head of funding options at Citi World Wealth. “I feel what is going to occur this 12 months and past is AI stands to profit numerous industries.” She cited the power transition for instance. “One other factor that individuals do not take into consideration is investing within the power transition. AI consumes numerous power, so the necessity to make it possible for power consumption is as environment friendly as potential,” mentioned Bitterly, who was talking at a Singapore briefing on the report. Bitterly added that there is been a “massive valuation disconnect” by way of the large winners from 2023 and the opposite beneficiaries of the AI pattern. Listed below are 4 areas which can be “clear beneficiaries from the approaching integration of AI into on a regular basis enterprise and private lives,” in keeping with Citi. AI infrastructure Key suppliers alongside the worldwide semiconductor worth chain are set to be massive beneficiaries in 2024, Citi mentioned. That may embrace chipmakers, semiconductor gear and knowledge facilities. The rise of generative AI has led to demand shifting from chips for general-purpose computing to high-performance chips, the financial institution famous. Semiconductor gear firms and fab amenities with the capability and know-how to provide cutting-edge chips maintain “near-monopoly positions,” mentioned Citi, which named Dutch firm ASML as the only supplier of the lithography gear wanted to imprint microchips. “Options to this gear and manufacturing know-how are laborious to come back by and there are vital boundaries for potential new entrants,” the financial institution mentioned. “Because the semi cycle turns upward in 2024, we see a chance for semiconductor producer and gear shares to catch as much as the GPU design corporations that led the market final 12 months.” Drug discovery Drug design and discovery is one space prone to profit from “vital AI disruption,” mentioned Citi. The financial institution described how scientists uncover medicine as “typically a sport of trial and error.” “The world’s most extremely subtle scientists pool their collective experience and successfully make educated guesses on how sure combos of proteins could have an effect on the human physique. These assessments then undergo medical trials, which may take over a decade to finish even earlier than FDA overview,” the financial institution mentioned. In any case this, 92% of these candidate medicine fail, in keeping with Citi Analysis. Nevertheless, AI will be capable of “dramatically cut back” the failure fee of such medical trials, it mentioned. The next success fee could have a “dramatic impact” on drugmakers’ profitability, in addition to the price of medicine. Robotics and automation The underlying tech utilized in generative AI — Citi referred to it as “neural networks” — can be the engine that can energy extra human-like robots and different types of automation. “When mixed with long-term traits of evolving provide chains and vehicle know-how, we see the celebrities aligning for funding on this house,” the financial institution wrote. The persevering with manufacturing and e-commerce growth will result in the necessity for extra automation and robotics, in keeping with Citi. A growth in U.S. manufacturing building happened final 12 months because the nation shifted manufacturing nearer to residence, and the buildout of warehouse capability to assist ever-growing e-commerce will proceed, it mentioned. “Whereas manufacturing sq. footage is rising, we doubt that each abroad manufacturing facility job will likely be changed one-for-one with American employees in an already tight labor market,” Citi mentioned. “Extra probably, corporations will proceed to put money into automation and robotics to maneuver packages and function meeting traces.” Cybersecurity Citi warned of a sinister aspect to the proliferation of AI: hackers utilizing AI chatbots to jot down the code to hold out cyberattacks. On the flip aspect, AI can be utilized to enhance the detection and prevention of such cyberthreats, the financial institution mentioned.