Amazon and Google Set to Benefit from AI Advancements according to Goldman Sachs

Goldman Sachs recently released a list of 10 themes for internet and interactive entertainment, highlighting the significance of artificial intelligence and the convergence of business models encompassing e-commerce, media consumption and advertising. The bank contends that artificial intelligence could be the next disruptive computing paradigm and has the potential to transform the consumer and enterprise computing landscape.

As traditional advertising and e-commerce business models continue to converge, companies are exploring new avenues for growth and synergy across sub-sectors. Digital advertising platforms are innovating around social commerce while retail media captures more of the advertising budgets of Amazon, Google and Meta. In light of this trend, Pinterest, DoorDash, Uber and Instacard are expected to benefit from this shift.

The rise of Asian e-commerce platforms has also significantly increased competitive intensity in western markets, with Pinduoduo and TikTok set to benefit. Furthermore, AI and automation in digital advertising, optimization of enterprise cloud spending and a shift towards convenience and selection for digital consumers are key themes that will shape the industry.

Goldman Sachs also points out that the travel industry will evolve with its marketing and customer acquisition programs, and the use of AI. Companies like Expedia, Booking.com, Airbnb, Clear Secure, Tripadvisor and Vacas are set to benefit. Within the interactive entertainment space, Goldman envisions a hybrid distribution model of mobile/cloud and the emergence of VR/AR physical equipment as the next generation of distribution, with Netflix, Spotify, Electronic Arts, Take-Two, Ubisoft, Playtika and Roblox expected to reap the benefits.

Finally, Goldman Sachs highlights the importance of small and medium-sized companies that have reduced costs through headcount reductions and broader cost efficiency measures, suggesting there is potential for returns based on idiosyncratic fundamentals. At the same time, government and regulatory scrutiny of the industry’s major players is a persistent theme, which could impact the likes of Amazon, Google, Meta, DoorDash, Lyft, Uber, Airbnb, Booking and Expedia.