The next phase of the AI story may be about its customers

The next phase of the AI story may be about its customers

Most of the AI debate has focused on the companies building it namely hyperscalers, chipmakers and data-centre operators. But as the cycle matures, the next important group may be AI’s customers. A recent Financial Times chart shows a striking gap: US technology earnings are growing at close to 50% year on year, while earnings growth among sectors expected to use AI heavily  including financials, manufacturing, media, transportation and healthcare remains far more modest. This is not necessarily a warning about AI; it may simply mark the transition from the build-out phase to the adoption phase.

The next test is whether businesses can turn AI spending into measurable economic value. Banks must improve efficiency or revenue, manufacturers must raise productivity, and healthcare companies must deliver better outcomes at lower cost. In other words, AI must gradually move from capital expenditure to return on investment. Stronger earnings and cash flows among AI’s customers will matter because they determine both the ability and willingness of businesses to keep investing in the technology.

This is where India deserves a closer look. Several sectors expected to become major users of AI globally: financials, manufacturing and healthcare are already important drivers of India’s economy, with growth supported by domestic credit, capital expenditure and structural demand rather than the AI cycle alone. As investors begin looking beyond the obvious AI beneficiaries for markets with broader sources of earnings growth, India offers a compelling combination: more reasonable expectations after a prolonged market correction, intact domestic growth engines and multiple sectors with strong earnings momentum.

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