AI Snips
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AI Slashes Business Costs Dramatically
- AI enables drastic cost reductions by automating human-dependent processes in businesses.
- This creates large profit margins upfront by cutting operating expenses significantly while revenue remains steady.
Pricing Power Fuels AI Growth
- Reducing costs with AI gives companies pricing power and capacity for rapid growth.
- Increased margins let businesses attract more customers without proportional cost increases, fueling expansion.
Competition Narrows AI Gains
- Excess returns from AI attract competition, pushing prices and profits back towards industry norms.
- This mean reversion can erode initial gains, creating a "value trap" where early value fades.