Key Points

According to a new Morgan Stanley Research report, AI adoption could affect 90 per cent of occupations while unlocking trillions of dollars in economic value.

It stated ,"AI Could Affect 90 per cent of Occupations......In the long term, this potentially translates to a market cap increase of USD 13 trillion to USD 16 trillion for the S&P 500 alone".

The report estimated that full AI adoption across S&P 500 companies could deliver an annual net benefit of USD 920 billion.

Of this, the report stated that USD 490 billion would likely come from agentic AI, software capable of planning, decision-making, and task execution with minimal human oversight, while USD 430 billion would stem from embodied AI such as humanoid robots.

Over the long term, the report added that this productivity surge could translate into a market capitalization increase of USD 13 trillion to USD 16 trillion for the S&P 500.

"As corporations pour billions into artificial intelligence, investors are asking the trillion-dollar question: Will this tech revolution supercharge productivity and profits, or simply automate away jobs?" the report stated.

The report also suggested a more optimistic outlook, with AI seen as a force that could elevate labor markets and create new roles, rather than merely displacing workers.

The report highlighted that technological revolutions, from electrification to the internet--have historically reshaped work and employment.

Similarly, while AI may displace some jobs, it is also expected to create entirely new professions and drive demand for re-skilling.

Heather Berger, U.S. Economist at Morgan Stanley, said, "While some roles may be automated, others will see enhancement through AI augmentation, and AI is likely to create entirely new roles."

Companies are already preparing by creating positions like Chief AI Officer to oversee adoption. Growth is also expected in areas such as data governance, compliance, and information security.

Morgan Stanley identified three key sectors with the greatest potential for AI-driven value: consumer staples distribution and retail, real estate management and development, and transportation.

From supply-chain optimization and personalized pricing in retail, to humanoid assistance in real estate, and autonomous delivery systems in logistics, AI adoption could redefine operations across industries.

As AI capabilities continue doubling every seven months, the report concluded that investors should closely track adoption potential, as the pace of improvement and its implications for value creation remain underappreciated.

- ANI