The development of artificial intelligence (AI) is set to transform many industries. In addition to the software sector, heavy industry and mining may be among the biggest winners, according to experts.
Rolando Grandi, CFA, has closely followed developments in artificial intelligence for years. He has the longest track record in this field in France—and was also one of the first in all of Europe. In 2018, he launched France’s first AI-focused investment fund for La Financière de l’Echiquier, where he worked for more than 7 years. In 2024, he started his own specialist asset manager, Itavera Asset Management. Soon after, he launched the IAM Artificial Intelligence Fund.
Media attention often centers on the multibillion-dollar investments of the Magnificent Seven when it comes to AI, Grandi observed. “But in reality, many more companies are working intensely with AI,” he said. For example, the CEO of BT Group recently stated that the telecom company expects to operate with significantly fewer employees by 2030 thanks to AI—while revenue is projected to increase. “We hear similar signals from other sectors, such as logistics, manufacturing, and agriculture. Every investor will need to understand the impact of AI on companies and industries.”
According to Grandi, the strength of artificial intelligence lies in its universal character. “AI is applicable in every sector, because nearly every company has access to data and can access computing power via the cloud,” he explained. “With the right datasets, companies across various sectors can develop their own AI applications.” One example is the American supermarket chain Walmart, which uses AI to optimize inventory management. “That reduces working capital and increases product availability for customers. Thanks to automation and AI, Walmart also cuts costs, which creates room to either lower prices or improve profit margins.”
Grandi sees examples like these across all sectors, though progress varies. “The tech sector is leading, not just in developing AI tools, but also in implementing them. ServiceNow, a software company in California, has already saved more than 1 billion dollars in costs thanks to AI.” Banks are also moving fast. “JP Morgan alone invests nearly 20 billion dollar per year in technology, with a large share going toward artificial intelligence.”
Paddy Flood, technology analyst at Schroders and co-manager of the Schroders Global Innovation Fund, likewise pointed to the software industry as a front-runner. In particular, he highlighted the rollout of co-pilots that accelerate software development. “Numerous software firms report that AI is significantly boosting productivity.”
Severe crisis at Alphabet
In sectors like agriculture and logistics, the AI investment cycle has only just begun. According to Grandi, cyclical sectors such as heavy industry and mining stand to gain the most from AI. “These are capital-intensive industries with razor-thin profit margins and low returns on invested capital. By using AI and automation, they can reduce and optimize investment needs, thereby increasing margins. They are already gathering more data through sensors, and the potential is huge with the use of robots and drones.”
Grandi does not see any sectors becoming irrelevant due to AI. “Some companies will thrive through effective AI implementation, while others in the same sector that fail to invest could end up as losers.” To identify the winners in advance, he frequently talks with company management. “It’s critical to understand the technology and anticipate how it will evolve. For example, we quickly saw that energy demand would explode due to the construction of numerous data centers, while supply would fall short. That’s why we took early positions in the nuclear supply chain.”
Nokia and Kodak are well-known examples of companies that failed to adapt in time to technological change. A company now facing a similar threat, according to Grandi, is Alphabet. “Google’s parent company is in the midst of the most existential crisis in its history. It holds a dominant share in mobile search and can only lose ground. That risk becomes reality if it chooses to keep milking its strong market position instead of investing heavily in AI—even if that means short-term margin pressure.”
Flood of Schroders takes a different view, arguing that tech companies like Meta and Alphabet benefit from vast data resources and economies of scale, which allow them to continuously improve their products and shield themselves from new competitors. Regarding Google, he added that AI’s impact so far is most visible in industries focused on content creation. “Advertising platforms like Google and Meta are trying to offer generative AI tools to their clients, hoping to enable more personalized content with higher conversion rates.”
Competitive erosion of advantages
The Schroders technology expert sees especially strong potential for transformation in healthcare and IT services. “AI offers great promise for drug development, but there are still major obstacles, especially in terms of accuracy and regulation. IT service providers may also face declining demand for consultants, as companies could soon solve many of their own IT issues thanks to AI.”
AI tools can deliver major productivity gains, but Flood questions whether this will translate into profit margin growth. “AI is accessible to everyone. Companies don’t need to build their own expensive data centers or acquire licenses—they can simply subscribe to services like ChatGPT. That means any advantage can quickly be competed away.”
According to Flood, companies with access to unique and high-quality proprietary data will benefit most from AI. “Those data allow them to create products and services that are hard to replicate,” he said. He also sees strong potential for ERP software providers, because switching platforms is rarely an option for customers due to the complexity of the software. “If these companies apply their rich datasets to AI tools, they can generate extra commercial value.”
Image: fitting the subject of this article, we asked ChatGPT to suggest an illustration. Its description: A surreal yet realistic landscape where AI and traditional industry converge—a futuristic robot inspects a mining facility at sunrise. In the background are drones in the sky, autonomous trucks on the ground, and holographic charts hovering over machinery. The color palette is warm (orange/red morning light), with industrial grays and blue tech accents. Modern and traditional elements clash and blend.