By: Alex Olshanskiy

Artificial Intelligence (AI) isn’t a genie that magically appeared from a lamp in late 2022. It has been hiding in plAIn sight, evolving steadily over the years under various names—machine learning, neural networks, data science—and is becoming increasingly integrated into our lives and businesses. It’s not a sudden breakthrough, but rather the result of years of innovation, research and trial. Companies like Alphabet, Carrier, Chevron, Digital Realty Trust, Eli Lilly, Exxon, Capital One Financial and others in your portfolio have been instrumental in not only advancing AI technology but also positioning it as a key driver for future growth. These organizations are shaping the landscape and ensuring that AI isn’t just a tool of today but a cornerstone for tomorrow’s business strategies. As we look ahead, it’s clear that AI is no longer a distant concept, but it is an essential force that is already transforming industries, solving complex challenges and opening doors to new opportunities.

The goal of any company is survival, but not just survival. The company must also grow, and one factor that can help with growth is productivity. This is easier said than done. While recent creations like Chatbots are sometimes fun to talk to, they can be pretty boring to talk about. Conversations about AI often get stuck in a rut, fixated on the well-worn, almost cliché image of a future where robots rule the world. Attention to productivity is an essential criterion for companies that we choose for our investors. Tools like the plow and steam engine revolutionized manual labor and enabled humans to accomplish physical tasks more efficiently and on a larger scale. Similarly, technology has long been a tool for mental labor, helping thinkers, innovators and creators process complex information and solve problems more quickly. But AI takes this evolution a step further. It has shown its potential to amplify human cognitive abilities, not just as a tool to assist, but as a partner that can analyze vast amounts of data, uncover hidden patterns and make decisions with speeds and accuracies beyond human capacity. AI will not replace the thinker, but it will empower the mind, allowing us to tackle even greater challenges, unlock new realms of creativity and propel innovation in ways we’ve only begun to imagine. The question is no longer if AI will transform the landscape, but how it will redefine the limits of human potential.

AI is also revolutionizing healthcare, with applications in predictive analytics, personalized medicine and enhanced diagnostics. AI algorithms can interpret patient data to identify potential health risks, predict disease progression and recommend personalized treatment plans. This not only improves patient outcomes but also helps optimize healthcare delivery and reduce costs. Eli Lilly’s CEO David Ricks is investing in artificial intelligence and machine learning in areas including drug discovery, natural-language generation, robotic-process automation and chatbots. The goal is to grow what Lilly calls its “digital worker-equivalent workforce.”

In the energy sector, AI is being used to optimize energy consumption and reduce operating costs by sifting through substantial amounts of data. AI algorithms can identify patterns and trends in energy usage which enables companies to maximize energy consumption and reduce their environmental impact. Chevron, ExxonMobil and Enterprise Products Partners L.P. are leveraging AI to enhance productivity and sustainability in the energy sector. Chevron uses AI for predictive maintenance, exploration advancement and carbon management, while ExxonMobil applies it in refining, energy efficiency and supply chain development. Enterprise Products Partners utilizes AI for pipeline monitoring, energy trading and asset management. These companies are harnessing AI to improve operations, reduce costs, improve safety and lower environmental impacts, making it a key driver for their future growth and long-term competitiveness in the global energy market.

Furthermore, generative AI is showing great promise in transforming customer experiences, particularly in the financial sector. AI-powered chatbots and virtual assistants provide personalized financial advice, answer customer queries and assist with complex tasks like retirement planning or mortgage selection. This not only heightens customer satisfaction but also improves efficiency and brings down costs for financial institutions.

Google is at the forefront of the AI revolution with its significant investments in AI research and development across various domains. The company’s new AI chip, Trillium, is a testament to Google’s commitment to the advancement of AI capabilities. Trillium offers unparalleled performance and efficiency which allows faster AI training and handling of massive datasets with ease. This breakthrough technology is powering Google’s latest AI model, Gemini 1.5 Pro, which represents a significant leap forward in AI capabilities.

Gemini 1.5 Pro can process up to one million tokens, equivalent to approximately 1,500 pages of text, allowing it to analyze and understand extensive documents and datasets with exceptional accuracy. This enhanced capability opens up new possibilities for AI applications, including deep research, complex problem-solving and more sophisticated human-computer interactions. At the core of Gemini 1.5 lies a new version of the Mixture-of-Experts (MoE) architecture, which allows the model to learn and selectively activate the most relevant pathways within its neural network, thereby increasing efficiency and performance.

Google’s Deep Research feature in Gemini is transforming how research is conducted. By leveraging AI’s advanced reasoning and long-context capabilities, Deep Research can autonomously explore complex topics, compile comprehensive reports and provide detailed insights with minimal human intervention. This groundbreaking tool has the potential to revolutionize research across various domains, from academia and science to business and industry.

In addition to Trillium, Google has also developed the Willow quantum chip, which significantly reduces errors as it scales up, marking a major breakthrough in quantum error correction. Willow has demonstrated its potential for solving complex problems beyond the reach of classical computers, with applications in fields like medicine, energy and Artificial Intelligence. This achievement highlights Google’s diverse AI research efforts and its determination to push the boundaries of AI technology.

The rise of AI is driving an exponential increase in data generation and processing which is leading to a growing demand for data centers. This surge is further fueled by the increasing adoption of emerging technologies like AI, which require specialized infrastructure to support high-power densities. Digital Realty Trust (DLR), a leading provider of data center solutions, is leveraging AI to facilitate data center operations and enhance efficiency. AI-powered predictive analytics enable DLR to anticipate and manage workload distribution, improve resource allocation and minimize downtime. AI also plays a crucial role in boosting data center security by detecting anomalies, identifying threats and protecting valuable data in real time.

The increasing demand for data centers also benefits companies like Carrier, a global leader in intelligent climate and energy solutions. Carrier provides high-performance HVAC (heating, ventilation, and air conditioning) systems that are essential for cooling data centers and ensuring optimal operating temperatures for servers and other critical equipment. As data centers grow in size and complexity, Carrier’s advanced cooling solutions are becoming increasingly vital for maintaining efficiency, reliability and sustainability.

The AI revolution is well underway, and its impact is being felt across industries from finance to healthcare to energy. AI is transforming the way businesses operate and compete by optimizing operations, enhancing customer experiences and driving scientific breakthroughs. We at Tufton are looking for those companies that are revolutionizing business as usual. We are positioning your portfolios for future growth and helping our clients translate what is hidden in plAIn sight.