The launch of ChatGPT in November 2022 has significantly accelerated AI adoption and investment, according to UBS analysts. In a recent client note, they highlighted the substantial investment potential in AI, urging investors to focus on vertically integrated companies across the AI value chain.
UBS predicts annual AI-related revenues could surpass $1 trillion over the next decade, driven by productivity improvements in sectors like coding and customer service. The AI market size could range from $1.3 trillion to $4.4 trillion by 2032.
The bank identifies three investment layers in AI: enabling (AI data centers), intelligence (generative AI algorithms), and application (AI-powered software). The enabling layer is expected to attract significant capital expenditure, projected to reach $331 billion by 2027. The intelligence layer, though early in monetization, is poised for strong growth, while the application layer holds the greatest monetization potential but is challenging to quantify.
UBS sees the largest near-term opportunities in the enabling layer, anticipating a surge in investments in AI infrastructure and services.
