Potential Wealth Shift Ahead: Understanding the Technochasm

Editor’s Note: On Monday, my InvestorPlace colleague Eric Fry discussed the widening gap forming between companies that embrace rapid technological advancements and those that do not.

He termed this phenomenon the “Technochasm.”

Yesterday, my fellow InvestorPlace colleague Luke Lango elaborated on the significant changes expected due to the Technochasm.

Now, it’s time for me to provide insight.

Today, I will outline how the acceleration of the Technochasm could lead to unprecedented wealth transfer.

Before we delve deeper, make sure to mark your calendar for tomorrow, March 27, at 10 a.m. Eastern time. During this urgent briefing, we will present essential strategies to maximize profits from this next chapter in the Technochasm.

Click here to automatically reserve your seat for the event.

Now, let’s explore today’s discussion…

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We’ve seen this scenario unfold multiple times in history.

A groundbreaking business tool emerges, prompting companies to adopt it for improved decision-making, cost reductions, and increased profits.

In this process, some companies thrive while others face extinction.

For example, when the internet started to gain traction, traditional retailers such as Borders and Blockbuster failed, while Amazon.com Inc. (AMZN) flourished.

Similarly, the smartphone boom devastated BlackBerry Ltd. (BB) and Nokia Oyj (NOK), while Apple Inc. (AAPL) and Alphabet Inc. (GOOG) thrived.

Tesla Inc. (TSLA) also transformed the automotive industry, with companies that failed to adapt suffering severe consequences.

Now, we witness similar transformations within the realm of artificial intelligence.

Firms across healthcare, finance, energy, retail, and manufacturing are adopting AI to enhance their profit margins.

Businesses effectively utilizing AI in innovative ways may emerge as the top stock market performers.

For instance, some companies are generating substantial profits thanks to newly developed AI efficiencies.

Large organizations are starting to produce tens of billions of dollars in revenue with just a handful of employees empowered by AI.

Additionally, companies that rely heavily on human labor may increasingly turn to AI to achieve significant cost efficiencies.

While I am empathetic toward job losses, it is important to face the reality that such changes are inevitable.

Consequently, there will be two categories of companies in this new landscape:

1. Those that harness AI, operating with fewer employees while achieving substantial revenue.
2. Companies that fail to adapt and ultimately go out of business.

Take Amazon as a clear example.

This retail giant serves as the second-largest private employer in the U.S., with 1.5 million staff members.

Furthermore, it invests heavily in AI.

Amazon is developing fully autonomous warehouses and working to automate its delivery processes with self-driving vehicles and drones. Currently, approximately 30% of its “workforce” consists of robots.

So, consider this: how long before Amazon decides its robots can handle the full workload currently managed by its 1.5 million employees? What will happen if those workers suddenly find themselves jobless?

According to TechCrunch, 2024 already witnessed over 150,000 job losses across 549 companies attributable to AI. This year alone, 22,000 tech workers have lost their jobs, with 16,084 of those layoffs occurring in February.

As more companies make these transitions, a chasm is emerging.

On one side are companies that leverage AI to enhance efficiency and profitability, gaining market leadership. On the opposite side are those that do not adapt, likely to stagnate or collapse under increased competitive pressure.

The economy is undergoing a seismic shift, leading to a stark divide between those who thrive and those who falter. This divide is what my InvestorPlace colleagues, Eric Fry and Luke Lango, and I refer to as the Technochasm. We have discussed this subject for the past five years.

We predicted a split between winners and losers, but we did not fully anticipate the profound impact that AI would bring.

Currently, we are poised to witness the most significant wealth transfer since the Industrial Revolution, driven by the Technochasm. This change is unfolding right now, and in this article, I want to outline the reasons and how you can prepare to ensure you align with the prosperous side of the divide.

Identifying the Winners in the Technochasm

So, how can you position yourself favorably on the right side of this evolving chasm?

This is where Eric, Luke, and I can assist.

Eric takes a broad “macro” approach, identifying major trends that drive significant, long-term movements within entire market sectors. Through this lens, he seeks to extract early-stage opportunities…