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Breakfast Business with Enterprise Ireland on Newstalk. Good morning. You're listening to Breakfast Business with Susan Hayes Culleton in for Joe Lynham today. So whether you're on your commute at home, getting ready for the day on the way back from night shift, been up all night with a baby or tuning in from around the world, you're most welcome. So coming up on today's show, we'll speak to the winner of the EY Entrepreneur of the Year, as well as the ins and outs of running an award winning family hotel. But first, we're going to talk through what happened in the markets this week with Aidan Donnelly from Davie. Good morning, Aidan.
Good morning, Susan. How are you?
I'm great, all together. And I'm going to, first of all, go to the release of the Financial Stability Review this week, Aidan, when the ECB Vice President said, markets are discounting a very benign scenario that AI is going to be fully implemented and adopted all over the world. Is he right?
Look, I think there's an ongoing debate really out there about, you know, we're hearing all the amounts of money that are going to be invested in AI and things like that. And, you know, the debate has now started, while nobody has a problem with all that investment, the question is who's going to make a return? When is the return going to be made and how much is the return going to be? And I think when you look at what we've seen in terms of individual companies and stock markets and things like that, there has been a huge amount of focus on it and valuations have gotten very high and people are starting to look at it. I don't think there's anybody listening that won't deny that AI is going to be hugely beneficial, both right across the board in our own lives, but also in the
in every company life in terms of improving efficiencies and optimisation of operations and things like that. So I think the issue really is around the degree of the return and the timing of it. And as is always the case, you know, markets are sometimes inclined to get a little bit over their skis when things like this come around.
But Aidan, if we look, let's just take the Magnificent Seven. Is anybody really making money out of AI apart from NVIDIA at the moment?
Well, there are definitely. You look at the likes of Alphabet and Meta, and while people are turning around and saying that they're not making any money, underneath it, an awful lot of the technology is driven. And if you're using AI-assisted search, are you making money out of search? Are you making money out of the AI that's running in behind the search? So it's a fine point to do it. But ultimately, a lot of these businesses, it's not about that there's going to be one single product that is in clearly labeled AI.
What were the significant market trends this week?
It's going to be much more about how does AI incorporate into your existing suite of products to make them more useful to the end customers that you're serving.
And of course, we are seeing generative, then we're moving into agentic and there's a range of others as well. But I also want to ask, big tech is now a third of the S&P 500, but Aidan, there are 7 million companies in America. What is the focus on AI distracting us from?
I think it's interesting. I was just in the States recently meeting a lot of industrial companies. And, you know, when you meet these managements, anybody who's involved in data centers or defense are going around and like everything is great in the world and everybody else in terms of the industrial stuff is finding it a little bit difficult. And I think there is a kind of an idea out there whereby, you know, companies are setting aside money because they think they need to invest in AI and they do. But it is to maybe to the exclusion of other investments nearer term that need to be made for the business. So it's a big question, I think, for businesses that are saying, look, we want to invest in AI, but there isn't.
the suite of products right now to invest in it. But people kind of ring fence this money and say, no, no, I need to be able to say that I'm investing in AI today, whereas there's nothing available, but it doesn't matter.
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