AI has moved on from buzzword to a full-fledged productivity enhancer. This global CEO tells us why!

From the desk of Miles Everson:

Investing has enabled many people to attain financial security and independence for decades.

That’s why every Wednesday, I share investing insights to help other folks build their wealth through this activity.

In today’s  “The Independent Investor,”  I’ll talk about selloffs and why they happen even during bull runs.

Curious?

Continue reading below to know why!

AI has moved on from buzzword to a full-fledged productivity enhancer. This global CEO tells us why!

Artificial intelligence (AI) tech used to be an easy sell.

Companies would roll out pilot programs and outline efficiency goals. In some cases, they’d even make bold promises about AI’s ability to make fundamental changes in how we work.

Said another way, AI was seductive and it didn’t require lots of evidence to get investors or companies to buy into it.

However, after years of hype, that’s no longer the case.

With AI seeing  real-world results , the focus has now shifted to productivity.

Some industries are already saving a lot of time with generative AI, and they're beginning to post strong productivity numbers.

Productivity drives companies, and their stocks, higher. A big jump in output can lift margins, cash flow, and long-term profitability for years.

A recent survey from the  Federal Reserve Bank of St. Louis  gives us some of the clearest data, showing where investors should focus next.

Certain industries have already improved productivity because of AI. That’s why today, we'll reveal why they're likely to pull further ahead while others lag behind.

Efficiency is the Name of the Game

The Federal Reserve Bank of St. Louis set out to answer a simple question in its 2025 survey:  Does AI really make businesses more efficient?

The survey looked into how much time was saved when using generative AI tools as a percentage of hours worked on a weekly basis. In addition, labor productivity and time saved per industry since ChatGPT’s November 2022 release were also mapped out.

To calculate labor productivity, economists compare an industry's output (usually sales) with its inputs (primarily labor hours). This helps pinpoint changes in revenue based on the number of hours worked.

If revenue grows without adding labor hours, productivity is rising.

Add in AI-related time savings, and the survey results were clear. Across the U.S., generative AI saved workers 1.6% of their total work hours.

That may not sound like a lot. But with about 134 million full-time workers in the U.S., that translates into billions of hours per year.

Researchers ultimately fed that data into a standard production model. They found that generative AI lifted labor productivity by as much as 1.3%.

This might be the most impressive finding: For every 1 percentage point in AI time savings, productivity increased by 2.7 percentage points.

Ultimately, a better output per worker improves profitability, which is what boosts company earnings over time.

That said, this productivity boom differs across industries.

Information services are leading the pack, a predictable outcome since businesses in this sector regularly adopt bleeding edge tools. Their workers spend more time coding, analyzing, and producing content inside software environments where AI tools easily plug in.

On the other hand, arts and entertainment, alongside management, were the least productive.

Generative AI is also making employees more efficient in finance, insurance, real estate, manufacturing, and construction.

In finance, AI can build complex models in a fraction of the time it takes a human. Within real estate, the technology streamlines listings and pricing. In manufacturing and construction, AI can help machines run for longer.

Take a look:

According to  Professor Joel Litman , Chairman and CEO of  Valens Research  and Chief Investment Officer of  Altimetry Financial Research, AI doesn’t need to replace industries to change how their economics work.

All it has to do is reduce a fraction of the labor hours to improve productivity.

Plenty of industries claim to have AI strategies in place. However, far fewer will show true gains in productivity.

Information technology is surging ahead. Finance, insurance, real estate, manufacturing, and construction are also performing well.

Industries like health care and food services haven't been quite as successful, but that may change in the future.

For now, the biggest winners will be the businesses already leveraging AI to improve productivity.

… and as an investor, these are the firms you should look out for.

Hope you’ve found this week’s insights interesting and helpful.

Stay tuned for next Wednesday’s The Independent Investor!

There’s a moment every investor dreads… and no, it’s not the headline-grabbing collapse, but the quiet miscalculation.

Learn more about  this USD 2 million mistake that shook up an iconic brand  in next week’s article!