Podcast Summary: "The AI Agents Are Here" – Morgan Stanley's Thoughts on the Market
Release Date: March 11, 2025
Host: Adam Jonas, Global Head of Autos and Shared Mobility
Co-Host: Michelle Weaver, US Thematic and Equity Strategist at Morgan Stanley
Introduction
In the March 11, 2025 episode of Thoughts on the Market, hosted by Adam Jonas and Michelle Weaver from Morgan Stanley, the duo delivers a comprehensive wrap-up of key themes from the recent Technology, Media, and Telecom (TMT) conference held in San Francisco. This episode delves into the evolving landscape of tariffs, artificial intelligence (AI) advancements, autonomous vehicles, and the burgeoning field of humanoid robotics, providing listeners with insightful analysis and expert commentary.
Tariffs Impact on Tech, Media, and Telecom Companies
Discussion Highlights: The conversation opens with a focus on the persistent news of tariffs and their implications for tech, media, and telecom (TMT) companies. Michelle Weaver elaborates on the spectrum of tariff exposure across these industries.
Key Points:
- Varied Exposure: Software companies face minimal tariff exposure, whereas hardware companies encounter significantly higher risks.
- Mitigation Strategies: Companies predominantly rely on pricing power to pass increased costs onto consumers. Another common strategy is diversifying manufacturing footprints to reduce dependence on China.
- Timeline for Impact: The effect of price changes due to tariffs varies by company, largely dependent on inventory levels.
Notable Quote:
"The primary method of mitigation was really relying on pricing power and passing off those increased costs to customers."
— Michelle Weaver [00:43]
Tariffs Impact on the US Auto Industry
Discussion Highlights: Adam Jonas shifts the focus to the US auto industry, highlighting the sector-wide opposition to tariffs imposed on Mexico and Canada.
Key Points:
- Industry Opposition: Suppliers, dealers, and OEMs unanimously oppose tariffs on North American vehicles.
- Consumer Impact: Tariffs could elevate average monthly auto payments from $750 to over $800, potentially increasing car prices by 5-10%, which could strain consumers.
- Negotiation Outlook: There is optimism that by the end of the year, negotiations might lead to revisions in tariff policies affecting approximately 15 million sales authorization requests (SAR), a decrease from last year's 16.3 million.
Notable Quotes:
"If these things were put in place, you'd have 15 million SAR in play, down from 16.2, 16.3 million last year."
— Adam Jonas [01:40]
"I don't think the auto consumer is strong enough for that."
— Adam Jonas [01:55]
Evolution of AI Since the Launch of ChatGPT
Discussion Highlights: Michelle Weaver provides an insightful analysis of how conversations around AI have evolved since the introduction of ChatGPT in November 2022.
Key Points:
- 2023: Initial excitement with limited concrete adoption plans and nascent AI tools.
- 2024: Increased AI adoption with straightforward solutions like chatbots and coding assistance tools.
- 2025: Emergence of more sophisticated, business-specific AI use cases, exemplified by eBay's AI-enabled features.
Notable Quotes:
"It's been a lot more unique, more business specific use cases and methods of AI adoption."
— Michelle Weaver [03:15]
"Shop the Look... recommends things that it thinks you'll like."
— Michelle Weaver [04:21]
Advancements in Agentic AI and AI Agents
Discussion Highlights: The hosts delve into the concept of agentic AI, emphasizing its enhanced reasoning capabilities compared to traditional AI tools.
Key Points:
- Definition: AI agents possess the ability to perform complex reasoning and execute multi-step processes autonomously.
- Practical Example: Salesforce demonstrated an AI agent resolving delivery issues by interpreting a delivery driver's voice message, cross-referencing systems, and proposing actionable solutions within a minute.
Notable Quotes:
"An AI agent is something that is able to go off and think through a bunch of different steps."
— Michelle Weaver [04:37]
"That's a pretty good example of more sophisticated reasoning."
— Michelle Weaver [05:00]
Autonomous Vehicles: Adoption and Innovation
Discussion Highlights: Adam Jonas shares exciting developments in the autonomous vehicle (AV) sector, particularly highlighting Waymo's advancements and broader market implications.
Key Points:
- Waymo’s Expansion: Over 1,000 Waymo vehicles are now operational, with projections aiming for nearly 30,000 by 2030.
- Consumer Experience: Positive firsthand experiences with autonomous vehicles are shifting consumer perceptions towards accepting driverless cars.
- Technological Integration: The integration of AI, including agentic capabilities, enhances AV performance through continuous learning and improvement.
- Competitive Landscape: Increased competition among tech giants and aggressive advancements by Chinese companies underscore the geopolitical significance of AV technology.
Notable Quotes:
"Waymo has well over 1000 vehicles on the road. Brian Nowak and the Internet team has a really nice city by city forecast model going out to 2030, showing the expansion of that to, I think, close to 30,000 vehicles by the end of the decade."
— Adam Jonas [06:00]
"The more they drive, the better they drive. And you train these models, you have these geopolitical and technological confluences here that are going to drive a much more rapid autonomous vehicle adoption than we think investors think."
— Adam Jonas [07:10]
Humanoid Robots: Innovations and Future Prospects
Discussion Highlights: The episode transitions to the realm of humanoid robots, with Adam Jonas sharing his firsthand observations and insights from the conference.
Key Points:
- Technological Breakthroughs: Significant advancements in humanoid robotics, with machines exhibiting human-like form and functionality.
- Industry Presence: Numerous established companies and startups in both the United States and China are actively developing humanoid robots, driven by substantial capital investment.
- Geopolitical Drivers: National security and technological supremacy are key motivators behind the rapid development of humanoid robots, especially in China.
- Broader Implications: Improvements in humanoid robotics are synergistic with advancements in autonomous vehicles, drones, aviation, and other tech sectors, creating a robust innovation flywheel.
Notable Quotes:
"This is a revelation. History books are going to be written about this time when the machines started to make the machines."
— Adam Jonas [08:39]
"Geopolitical forces are driving this too. Any advancement in the state of the art of a Waymo or autonomous car is helping to train the same computer systems and inferences and sensors that are also used in humanoids."
— Adam Jonas [09:45]
Conclusion
Adam Jonas and Michelle Weaver wrap up the episode by reflecting on the transformative technologies discussed and their profound implications for markets and society. They emphasize the critical role of Morgan Stanley in guiding clients through these rapidly evolving technological landscapes.
Closing Remarks:
"I'm just super privileged to be with you and this platform at Morgan Stanley to help our clients navigate this at such an interesting time and consequential time for markets and for the world."
— Adam Jonas [10:50]
The hosts encourage listeners to subscribe, leave reviews, and share the podcast to stay informed on the latest market insights and technological advancements.
Final Note: The episode underscores the dynamic interplay between technological innovation and market dynamics, highlighting how advancements in AI, autonomous vehicles, and robotics are reshaping industries and consumer experiences. Morgan Stanley continues to monitor these trends, providing strategic insights to navigate the complexities of a rapidly changing market landscape.