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The AI Revolution: bringing joy to your daily commute

Past performance does not predict future returns. You may get back less than you originally invested. Reference to specific securities is not intended as a recommendation to purchase or sell any investment.

This is the first article in our AI series, you can read the next articles here:

How AI is changing the face of global computing
AI – helping to speed up drug recovery

Have you noticed a difference in your daily commute? The Global Innovation team have. Instead of laboriously scrolling through our libraries of outdated playlists to find that particular song to kickstart our days, Spotify is doing a pretty good job at predicting what that song might be. I can even type in my mood and a playlist emerges, tailored to the artists I often listen to.

Although we don’t often think about it, this is AI touching our every-day lives. And what's more, we can all experience first-hand the improvements in AI unfolding (rewind two years and for some unfathomable reason, Discover Weekly was convinced all I wanted to listen to was Swedish rock.) What is going on beneath the surface is that when the prediction accuracy of Spotify’s machine learning system reached a certain threshold, the company was able to take a quantum leap forward in rethinking its business model: the vision switched from providing customers with the toolkit to create playlists themselves to one premised on the idea that you and I should never have to create playlists again.

Netflix, another direct-to-consumer business, is also enhancing its customer experience through AI deployment. Not only are the movies personally recommended to us powered by AI algorithms, but the actual production of Netflix Original shows is optimised using AI. What this means is a lower cost of content production and shorter time to market, both of which flow through to the benefit of the customer. Put very simply, these are two companies using AI to drive automation and create genuine customer value in the process – the cornerstone of what the Global Innovation team looks for in our companies.

However, possessing AI capabilities by itself is not enough to give a company an edge, and not every great innovation is a great investment. Indeed, part of the AI revolution we are currently witnessing revolves around the democratisation of this technology – all companies can (or soon will be able) to create magical experiences for customers using large language models and machine learning. Those companies who can do this while simultaneously creating value for shareholders need to have complimentary strong barriers to competition.

In the direct-to-consumer cases of Spotify and Netflix, these barriers come in the form of scale economies and network effects. It is hard to overstate the importance of owning the data on a large base of sticky customers when it comes to winning on the AI battleground − it's this data that trains the AI model and then constantly improves it. The more customers that feed the model, the more accurate it becomes: recommendations strike a chord more frequently; efficiencies are further enhanced. With 515 million monthly active users in the case of Spotify, and 160 million customers using Netflix, the treasure troves of proprietary data these companies have at their disposal is a unique advantage.

Both of these companies are primed to be beneficiaries of the AI revolution we are in the early innings of, yet neither is a technology company. To access the gains from AI driven automation, you do not have to be confined to investing in the companies creating the infrastructure of Chat-GPT-esque products. AI is a ‘General-Purpose-Technology' spanning all industries, with the potential to enable vastly more productive products, services and organisational design. We believe the emerging winners from this AI transition will be those with the most innovative cultures, who are nimbly adapting to create customer value.

Understand common financial words and terms See our glossary

Past performance is not a guide to future performance. The value of an investment and the income generated from it can fall as well as rise and is not guaranteed. You may get back less than you originally invested.

The issue of units/shares in Liontrust Funds may be subject to an initial charge, which will have an impact on the realisable value of the investment, particularly in the short term. Investments should always be considered as long term.

Investment in funds managed by the Global Innovation (GI) team may involve foreign currencies and may be subject to fluctuations due to movements in exchange rates. The team may invest in emerging markets/soft currencies or in financial derivative instruments, both of which may have the effect of increasing volatility.


This is a marketing communication. Before making an investment, you should read the relevant Prospectus and the Key Investor Information Document (KIID), which provide full product details including investment charges and risks. These documents can be obtained, free of charge, from www.liontrust.co.uk or direct from Liontrust. Always research your own investments. If you are not a professional investor please consult a regulated financial adviser regarding the suitability of such an investment for you and your personal circumstances.

This should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Examples of stocks are provided for general information only to demonstrate our investment philosophy. The investment being promoted is for units in a fund, not directly in the underlying assets. It contains information and analysis that is believed to be accurate at the time of publication, but is subject to change without notice. Whilst care has been taken in compiling the content of this document, no representation or warranty, express or implied, is made by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified. It should not be copied, forwarded, reproduced, divulged or otherwise distributed in any form whether by way of fax, email, oral or otherwise, in whole or in part without the express and prior written consent of Liontrust.

Clare Pleydell-Bouverie
Clare Pleydell-Bouverie
Clare is a fund manager of the Liontrust Global Innovation, Liontrust Global Dividend and Liontrust Global Technology funds. She joined the team in 2022 and is a fund manager with 8 years of industry experience, having previously worked in global equities at Neptune Investment Management, Liontrust and in private equity research across a variety of industries. Clare holds a first-class degree in history from Christ Church College, Oxford University and is a CFA Charterholder.

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