Episode 10.2: Opportunity Hidden in Plain Sight: AI in Japan

• Episode and guest introduction (0:00 – 0:29)
• AI and the opportunity for businesses in Japan (0:30 – 1:37)
• Disclosures (1:38 – 2:28)

Alex Warren: Welcome to The Power of Patience. I’m Alex Warren, product specialist at Aristotle Capital. I’m speaking with Aylon Ben-Shlomo, Client Portfolio Manager at Aristotle Capital. We’re going to be changing up the format today to talk about Japan, and this episode is titled Opportunity Hidden in Plain Sight. Aylon, thank you so much for joining me today.

Aylon Ben-Shlomo: Thanks for having me, Alex, and thanks to all the listeners out there.

Alex Warren: All right, Aylon, I want to get your thoughts on AI because it’s been a hot topic lately. Can you talk about the opportunity for businesses in Japan?

Aylon Ben-Shlomo: The headlines around AI have been much more focused on the consumer-facing application, things like ChatGPT, and of course, we’ve seen the darlings of the Magnificent Seven as they’re being called, and how those stock prices have really taken off. While those are interesting, and they do seem to be unlocking certain efficiencies, some of the things that get us interested, particularly with respect to Japan, where there’s lots of industrial companies, manufacturing companies, goods producing companies, rather than software companies, is what the second and third order effects of enterprise-facing AI technologies can do.

There are companies that are using AI to unlock the next generation of manufacturing, unlock the next generation of factory automation, warehouse automation, and other types of areas that have lower margins today, but lots of opportunity for higher margins and higher cash flows in the future. Instead of looking to make bets on who will win the AI race, what we’re trying to do is understand how AI might benefit businesses in the future.

For additional disclosures please refer to www.aristotlecap.com.