Companies are increasingly adapting artificial intelligence strategies as the earnings season has arrived. PayPal and IBM are also appealing to their customer base by embracing new technology.
The transformative A.I technology can boosts growth in companies soon, as per PayPal.
“We expect A.I. will enable us to meaningfully lower our costs for years to come. Furthermore, we believe that A.I., combined with our unique scale and sets of data, will drive not only efficiencies, but will also drive a differentiated and unique set of value propositions for our merchants and consumers.” PayPal CEO Dan Schulman said on the company’s earnings call.
Although PayPal did not directly state that the utilization of A.I. to reduce costs would lead to a reduction in the number of human employees, the declaration was made shortly after IBM's CEO, Arvind Krishna, mentioned to Bloomberg that A.I. could take over around 8,000 positions at the company. Krishna also explained that the technology could handle basic tasks such as transferring workers to different departments.
The announcements regarding inclusion of A.I have not reflected positively on stock returns. Following the release of the Bloomberg article, IBM's stock has decreased, and PayPal's shares have dropped by over 10% due to apprehensions about its prospects for improving profit margins.
Some firms, such as Google and Microsoft under Alphabet, are aiming to market A.I. as a commodity for other companies to purchase. Meanwhile, other companies are supporting A.I. with hardware and services, including Nvidia, whose shares have surged by nearly 100% during the A.I. expansion.
PayPal's emphasis on A.I. speaks to the essence of the present state of the technology sector, as layoffs become more common and major industry player Meta Platforms (META) promotes a “Year of Efficiency.” During the earnings call on Monday, when asked about reducing costs and operating expenses in the future, Schulman cited A.I. as the solution.
“You're going to see our costs continue to come down year-over-year-over-year And this is not just about efficiencies, by the way. It's not about just cost reduction. This is about doing things better. I think there's no question that A.I. is going to impact almost every function inside of PayPal, whether it be our front office, back office, marketing, legal, engineering, you name it.”
“A.I. will have an impact and allow us to not just lower costs, but have higher performance and do things better.” Dan Schulman said.
