It’s no wonder. AI-hungry investors have propelled Nvidia Corp., which makes the chips needed for complex AI computing tasks, into the best-performing stock among mega-caps this year. Relatively obscure firms with AI in their names have also skyrocketed. BigBear.ai Holdings Inc. has surged more than 300%, while C3.ai Inc. and BuzzFeed Inc. have more than doubled. Guardforce AI Co. is up 51%.

A lot of the companies tossing around the phrase AI are just taking advantage of the hype. Some are speaking aspirationally about how they see AI transforming their businesses—one day, some day. And then there are the real, practical use cases for AI and machine learning that companies have been actively investing in, developing and using—in some cases, long before AI became a buzzword—proving that the power of these algorithms is already reaching far beyond chatbots to change everything from the way companies manage their parts inventories to how they’re recruiting for job candidates.

“It is impossible to quantify what the impact of AI could be and equally possible that a wave of enthusiasm carries stocks with expertise in or exposure to AI, no matter how tenuous, higher and higher,” said Russ Mould, investment director at AJ Bell Plc. “All investors can do is stick to their disciplines and focus on competitive position, management, and valuation, while making sure that they truly understand the business, before they put any capital at risk.”

Below is a look at how various companies and industries are using AI—largely based on commentary from this quarter’s earnings calls but also some key announcements made in recent weeks.

Alphabet Inc.’s Google is using large language models to strengthen its search engine, specifically by helping anticipate the intent of users’ queries, Philipp Schindler, Google’s chief business officer, said on the company’s fourth-quarter earnings call on 2 February. AI is also used to increase consumer interactions with ads. “AI has been foundational to our ads business for the last decade,” he said.

During Meta Platforms Inc.’s own earnings call, chief executive officer Mark Zuckerberg said AI is “the foundation of our discovery engine and ads business.” The company is investing more heavily in AI to develop privacy tools as well as help advertisers serve more “relevant and engaging” ads, he said. Some of those efforts are already paying off, with conversions, or an advertiser’s desired outcome from ads, increasing 20% in the last quarter compared with the prior year. Meta also uses AI for their content algorithms. Microsoft Corp. CEO Satya Nadella said there’s a “sea change” happening in search. The company’s AI model, Prometheus, will allow it to make the biggest leap ever in the relevance of results, he said. Its new Bing search engine adds the ability to chat and can help users compose emails and other content. Google will integrate the underlying technology in its Bard chatbot into its own engine. CEO Sundar Pichai has said this will produce results that “distill complex information and multiple perspectives into easy-to-digest formats.”

Zoom Video Communications Inc. CEO Eric Yuan pledged to “layer more AI technologies into our products,” and touted new features like translation, video captioning and analysis for sales.

It’s clear that not every company has embraced the AI hype with the same enthusiasm as the ones above. For every major company that mentioned AI in an earnings call this quarter, there were scores more that didn’t utter the phrase at all.

Some companies, namely financial ones, have gone as far as to ban or restrict their employees’ use of ChatGPT in particular. Citigroup Inc., Deutsche Bank AG and Goldman Sachs Group Inc. are among those that have recently banned employees from using the chatbot. 

The clamour for everything AI bears hallmarks of the cryptocurrency frenzy that took Wall Street by storm a few years back, and more recently the metaverse. Only time will tell if investor interest will last longer than it did for those similarly untested concepts.