Adopters, Not Vendors
Libbie Frost@libbiefrost
+2.7%
since Oct 2
The idea
I believe the real AI money gets made by the companies using it, not the ones selling it. Markets price vendors richly while ignoring banks, insurers, retailers, and industrial players quietly rewiring their operations around models and automation. This basket is concentrated across finance, retail, industrials, insurance, transport, and drug discovery, weighted toward the names I think are furthest along, with some cash kept aside to add once earnings start separating real adopters from pretenders over the next few years.
What it owns
- Banks and payment networks are pushing AI into credit, fraud and advice, where small accuracy gains are worth billions. · JPMorgan ChaseIt is rebuilding its core operations around AI across credit decisions and internal research, a large incumbent moving AI-native at scale., American ExpressIt approves credit with machine learning models, using AI underwriting to keep losses low while approving more customers than traditional methods allow., VisaIt runs AI fraud detection across billions of transactions, one of the largest working AI deployments anywhere that protects margins and locks banks into its network., Morgan StanleyIt put AI assistants in front of thousands of financial advisors in their daily work, not as a press release, where productivity gains flow into wealth management margins.23%
- Retail and fast food run on thin margins, so AI in supply chains and ordering flows straight to profit. · WalmartIt runs inventory forecasting and automated warehouses on AI, turning supply chain speed into lower costs and better margins than retail peers., McDonald'sIt is automating ordering and kitchen operations across tens of thousands of locations, putting AI adoption to the test in a notoriously thin-margin business., Yum! BrandsIt is rolling AI voice ordering through drive-thrus, a large-scale deployment that shows up in labor costs and order accuracy if it keeps expanding beyond pilots.19%
- Tractors, mining trucks and delivery routes that drive themselves cut the biggest cost line: labor. · Deere & CompanyIt sells autonomous tractors and precision farming systems today, with farmers already paying for the autonomy and software that is shifting its margins., CaterpillarIt operates one of the largest autonomous vehicle fleets on earth in mining trucks, with autonomy already winning orders and lifting service revenue., United Parcel ServiceIt routes its entire delivery network with AI to squeeze miles and fuel from every route, protecting margins when package volumes face headwinds.17%
- Insurers that price risk with live data and models win customers the old actuarial tables can't. · ProgressiveIt prices risk with algorithms and live driving data, the core model for insurers repricing their books faster than traditional competitors., AllstateIt is rolling telematics across its book to price drivers on actual behavior, improving loss ratios with data-driven pricing that narrows the gap with faster movers., LemonadeIt was built AI-first from the start with models handling claims and underwriting, the riskiest name testing whether AI-native actually translates to a loss ratio and growth traditional insurers cannot match.15%
- Pricing, matching and routing are pure math problems, so AI shows up fastest in travel economics. · Uber TechnologiesIts entire marketplace runs on pricing, matching and routing models that turn scale into profit, with autonomous vehicle partnerships keeping it aligned to the shift., Delta Air LinesIt uses AI for seat pricing and operations management, an established airline trying to become the AI-native operator with better margins and fewer disruptions than peers.11%
- Drugmakers using AI to find and test compounds faster shorten the most expensive timeline in business. · Eli LillyIt is deploying AI across drug discovery and manufacturing with the capital to pursue it hardest, where speeding the pipeline is where adoption actually pays in pharma., Recursion PharmaceuticalsIt is a lab built around AI from inception, the pure bet on whether machine-driven drug discovery can find compounds the traditional path cannot.7%
- Cash8%