Artificial intelligence is on the brink of an 'iPhone moment' and can boost the world economy by $15.7 trillion in 7 years, Bank of America says

• Bank of America strategists predicted artificial intelligence will revolutionize everything as it teeters on its "iPhone moment."
• AI has many commercial uses and will allow for the democratization of data, among other upsides.

Artificial intelligence is about to have its "iPhone moment" and could revolutionize everything, according to Bank of America.

In a Tuesday note to clients, BofA strategists listed four reasons why AI is about to change the landscape: democratization of data, unprecedented mass adoption, "warp-speed" technological development, and abundant commercial uses.

"We are at a defining moment - like the internet in the '90s - where Artificial Intelligence (AI) is moving towards mass adoption, with large language models like ChatGPT finally enabling us to fully capitalize on the data revolution," they said.

Up until recently, AI could read and write but couldn't understand content, BofA said. Tools like ChatGPT have changed that, however, and its ability to understand natural language has opened the door to huge upside.

Ultimately, AI's ability to capitalize on data could boost the world economy by up to $15.7 trillion by 2030, in the firm's view, and the global AI market — software, hardware, and services — could reach $900 billion by 2026. The bank also sees a great deal of commercial use cases for the technology.

"It took ChatGPT just 5 days to reach 1 million users, 1 billion cumulative visits in 3 months and an adoption rate which is 3x TikTok's and 10x Instagram's," BofA said. "The technology is developing exponentially."

Large language models like ChatGPT make massive amounts of information accessible to everyone, without high barrier to entry or required training.

In addition, the exponential rate of technological development suggests that, within a decade, AI models could be a million times more powerful than they are today.

"Every sector will be impacted, but the immediate beneficiaries include tech hardware (semis, GPUs, data centres), software (cloud, analytics) and cyber (phishing)," the strategists wrote.

Meanwhile, UBS is forecasting that the artificial intelligence hardware and services market will reach $90 billion by 2025. In 2020, it was worth about $36 billion, per IDC and Bloomberg Intelligence data.

"Our estimate may prove to be conservative as growth in [large language models] and other generative AI technologies could be even faster than we expect given advancements in machine learning and deep learning capabilities," UBS Global Wealth Management's Solita Marcelli wrote in a client note Tuesday.