Artificial intelligence (AI) is a technology that enables computers to learn from trends and patterns, infer and act like humans, and make decisions. Similar to how humans attend school to learn, computers initially train on available data to prepare for tasks. As they work, they adapt their learning based on experience, refining their decision-making skills. The versatility of AI allows for its application in various ways for different purposes.
Utilizing AI technology across a broad spectrum of applications, companies aim to enhance data management and security, streamline workflows to boost productivity, personalize user experiences and customer service on e-commerce platforms, drive vehicles, improve search results, and more. AI has the potential to automate routine tasks, enabling humans to accomplish more in less time. However, the question remains – how can AI generate revenue?
Personalized searches and user experiences can help businesses target the right audience with the right products, optimizing marketing budgets. Enhanced security and data management can improve client service delivery and overall efficiency. The integration of AI could transform the realm of robotics.
Just as software and the internet have increased productivity levels, AI has the potential to take productivity to new heights. However, the realization of revenue and profits from AI investments will take time, as building a comprehensive AI ecosystem and achieving widespread adoption are crucial. This ecosystem will also encompass regulations governing the ethical application of AI.
Certain Canadian tech companies, particularly those in software and information technology services, are leveraging AI to enhance their offerings. While it may take time for the impact of AI investments to materialize, investing in software companies with strong customer bases and stable cash flow could be advantageous. AI implementation could help these companies enhance their average revenue per user.
One such company harnessing AI opportunities is OpenText (TSX:OTEX), an information management solutions provider that employs AI through OpenText Aviator to help companies enhance information efficiency securely. Although the addition of Aviator may not result in a significant boost, OpenText anticipates maintaining customer loyalty and continued growth through subscriptions and client support. The utilization of AI on private data through Aviator can enable businesses to tailor AI to their specifications, driving further efficiencies.
Similarly, Kinaxis (TSX:KXS) is utilizing AI for predictive analysis in supply chain management services, enabling accurate demand and supply predictions to manage inventory efficiently. By leveraging AI’s learning capabilities, Kinaxis aims to ensure agility in business planning and the digital supply chain. While the impact of AI on revenue and profits may not be immediate, Kinaxis aims to enhance efficiency and technological competitiveness through its AI initiatives.
In contrast, Coveo Solutions (TSX:CVO) is providing generative AI applications to companies through its CRGA platform, facilitating AI-powered searches and recommendations for enterprise clients. Although still incurring losses, Coveo has shown robust revenue growth and a focus on acquiring new clients. With its CRGA platform gaining traction, Coveo’s potential for success is evident, although the risk is present due to its nascent stage and financial instability. The key to success for any tech company, including Coveo, lies in achieving broad adoption and maintaining customer loyalty.
