AI: The Corporate Shield Against Tariff Headwinds
According to an HSBC report, AI adoption is helping S&P 500 companies mitigate tariff impacts, with cost reductions and efficiency gains. AI could potentially offset up to 25% of tariff burdens, turning a challenge into a catalyst for innovation and cost management amid growing labor cost concerns in some industries.
- Country:
- India
Corporate adoption of Artificial Intelligence (AI) is emerging as a pivotal strategy in lessening the blow from U.S. imposed tariffs, states a recent report by HSBC. The analysis reveals median operational cost reductions of 1.5 percent among 44 S&P 500 companies, alongside notable efficiency boosts averaging 24 percent.
The report suggests that if similar AI integration can secure a 1 percent cost cut across the S&P 500, companies could counter nearly a quarter of the strain from a 20 percent tariff, potentially prompting wider AI adoption as a strategic response to maintain margins.
HSBC compares the current tariff-induced challenge to the COVID-19 pandemic's push towards operational reinvention. Evidence shows AI usage among U.S. firms has surged by 50 percent since President Trump's tenure, but with ongoing debates around its impact on labor costs, notably in labor-intensive sectors like software services.
(With inputs from agencies.)
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