AI Will Produce Winners and Losers

Though many executives and analysts are trying very hard to figure out which firms benefit most from generative artificial intelligence and AI in general, the prior experience of firms with the internet suggests there also will be losers.

And those losers could come from industries focused on digital and physical products such as “print” media, as our experience with the internet suggests. 

Study Title	Authors	Year	Focus	Key Findings
How the Internet Changed the Market for Print Media	NBER	2019	Impact on print media	Household adoption of broadband significantly reduced print readership and circulation, leading to revenue decline for newspapers.
The Impact of the Internet on Media Industries: An Economic Perspective	Oxford University Press	2008	Economic impact on media	The internet weakens intellectual property protection, making it easier to distribute content illegally and reducing potential revenue.

Similar losses can be noted in retailing as well, with a shift from place-based and physical retail to online retail. 

Study Title	Authors	Publication Year	Key Findings
The Impact of E-Commerce on Retail Employment	Autor, D., Dorn, D., Hanson, G.	2017	Found that increased e-commerce adoption led to job losses in retail sectors most susceptible to online substitution (e.g., electronics).
Omnichannel Retailing and Customer Engagement: A Review of the Literature	S. Verhoef, M. Kannan, P. Bharadwaj	2009	Highlights the importance of omnichannel strategies for retailers to enhance customer engagement and satisfaction in today's digital age.
The Impact of Online Shopping on Brick-and-Mortar Stores	T. Van den Poel, R. Verhoef	2003	One of the earlier studies exploring the potential negative impacts of e-commerce on traditional brick-and-mortar retailers.

Advertising has seen some of the greatest shifts from the internet, though.

Source: Gemini

Put simply, digital now claims up to 82 percent of all U.S. ad placements and revenue. Print has declined from 42 percent to less than three percent. Linear video dropped from 38 percent to 16 percent. Radio dipped from 10 percent to half a percent. 

Channel	1996 (Billions)	1996 (%)	2023 (Billions)	2023 (%)
Print (Newspapers, Magazines)	80.0	42.1%	10.0	2.7%
Linear Video (TV Broadcast, Cable)	72.0	37.9%	60.0	16.2%
Network Radio	10.0	5.3%	2.0	0.5%
Other (Radio Spots, Out-of-Home)	28.0	14.7%	18.0	4.9%
Digital Ads (Search, Social Media, Display)	-	-	300.0	81.7%

It might be reasonable to expect the content industries, advertising and retailing will again be among the industries to see early AI disruptions. 

Financial services might also be included on the list of industries that saw early internet disruption, and might see further challenges from AI. More recently, various forms of “sharing” (transportation and lodging, for example) also have emerged, and might see further changes from AI. 

But manufacturing and pharmaceuticals seem poised for AI disruption as well. On the other hand, construction might see relatively low amounts of disruption. 

Industry	Potential AI Impact	Drivers
Manufacturing	High	Robots can handle repetitive tasks, improve precision, and optimize production processes. AI can also be used for predictive maintenance and quality control.
Transportation	High	Self-driving vehicles, logistics optimization, and automated traffic management are all powered by AI.
Customer Service	High	Chatbots and virtual assistants can handle routine inquiries, freeing human agents for complex issues.
Finance	High	Algorithmic trading, fraud detection, and risk assessment can be significantly enhanced with AI.
Healthcare	High	AI can assist in medical diagnosis, drug development, and personalized medicine.
Retail	Medium	AI can personalize recommendations, optimize inventory management, and automate tasks like pricing and promotions. However, the human element in customer service and product selection might remain crucial.
Legal	Medium	AI can analyze legal documents, predict case outcomes, and streamline research tasks, but human judgment will likely remain essential for legal proceedings.
Education	Medium	AI-powered tutors can personalize learning experiences, but human teachers will likely remain central for guidance and social interaction.
Media & Entertainment	Medium	AI can personalize content recommendations and automate content creation tasks.
Construction	Low	Manual labor and on-site decision-making are still crucial aspects of construction, making widespread AI adoption less likely. However, AI can be used for design optimization and project management.
Hospitality	Low	The human touch remains essential in hospitality, but AI can automate tasks like booking and guest communication.
Arts and Culture	Low	Human creativity and emotional connection are central to the arts, making AI unlikely to replace artists entirely. However, AI can be used for artistic exploration and content creation tools.

Right now, attention is logically focused on industries and functions that are susceptible to AI automation. But equally big changes could come if AI allows competitors to enter markets in new ways. Think ridesharing and peer-to-peer lodging. 

And there always is the possibility that new industries are born. Think search and social media.