Despite The Market Hype, Only 5% Of US Firms Use Generative AI In Production

Author: Hayden Buckfire | July 03, 2024 01:47pm

Artificial intelligence has captivated the financial markets and sent the SPDR S&P 500 ETF Trust (NYSE:SPY) into an upward spiral. Even though the S&P 500 is up over 15% through the first half of 2024, only a few firms have reaped generative AI’s benefits.

The Data: A post on X relayed data from Goldman Sachs.

Approximately 5% of US Firms Are Using Generative AI to Produce Goods and Services pic.twitter.com/JSoLlmXTuo
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) July 2, 2024

Despite the market’s hype, only 5% of U.S. firms are actually using generative AI. The figure is up slightly from October 2023 and is projected to increase to about 6% by the end of 2024. The note compiled data from a list of industries, some including:

Information companies: 15% of firms use GenAI. Projected to grow to over 20% by year-end.
Professional, scientific and technical companies: Around 12% of firms use GenAI. Projected to grow to over 15% by year-end.
Education companies: Around 6% use GenAI. Projected to grow to 12% by year-end.
Finance and insurance companies: Around 5% use GenAI. Projected to grow to 10% by year-end.
Health care companies: Around 5% use GenAI. Projected to grow to over 6% by year-end.
Construction companies: Around 4% use GenAI. Projected to grow to 5% by year-end.

Why it Matters: The data is consistent with the narrative that large information technology companies use generative AI substantially more than any other industry.

While the S&P 500 is up over 15% in 2024, the Invesco S&P 500 Equal Weight ETF (NYSE:RSP) is up under 4%, indicating that just a few large tech companies have moved the needle in the broader S&P 500. The iShares Russell 2000 ETF (NYSE:IWM) is up just 1% year-to-date.

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