Artificial intelligence (AI) is changing almost every industry, and transportation is no exception. While the way we move goods and passengers has changed relatively little over the last 50 years compared to some industries, AI is poised to unlock a transportation revolution -- and if you're looking for opportunities in artificial intelligence stocks, there are a number of them in this industry.
Keep reading to see some of the ways that AI is impacting the future of transportation.
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1. Autonomous vehicles
The largest impact of artificial intelligence is likely to be autonomous vehicles. While the technology has been slower to develop than many had predicted, it is now being rolled out in the real world, and the implications could be huge. It remakes the way we get around and the way we use roads and transportation systems.
Companies like Alphabet's (GOOG 1.25%) (GOOGL 1.27%) Waymo, Tesla (TSLA 1.85%), and Baidu (BIDU 1.02%) have already deployed autonomous vehicle systems. Waymo, for example, recently doubled the size of its coverage area in Phoenix, and expanded it in San Francisco as well.
Tesla has long offered driver-assist functionality it calls autopilot although "full self-driving", or Level 5 AV technology -- which CEO Elon Musk believes is essential to the company's value and competitive advantage -- has been elusive. Baidu, meanwhile, has deployed driverless taxis in several cities in China, and aims to have the biggest driverless ride-hailing area in the world this year.
Autonomous vehicle technology is based on artificial intelligence tools like computer vision. AV cameras need to receive and interpret data instantaneously so vehicles know to avoid potholes and pedestrians. As the technology gets better, there will likely be a wide range of opportunities for investors in both passenger transportation and logistics.
2. Intelligent traffic management
Another way that artificial intelligence could have an impact on transportation is through intelligent traffic management. For instance, smart traffic lights can turn from red to green when there's no traffic coming one way. AI sensors could also determine the best times to adjust traffic patterns for rush hour, for example by making a two-way street one way.
AI tools and algorithms could also predict congestion and improve traffic flow, thereby designing traffic systems that save people time, speed up the transportation of goods, and have beneficial externalities like reducing pollution.
Less-than-truckload (LTL) carriers like Old Dominion Freight Lines (ODFL 3.63%) and XPO Logistics (XPO 4.08%) stand to be among the beneficiaries of intelligent traffic management as they would save time shipping goods and turn over their trailers faster.
3. Predictive maintenance
In the manufacturing and transportation industries, predictive maintenance is already being embraced as a direct application of artificial intelligence. AI algorithms can analyze sensor data from vehicles, identify patterns and potential issues, and predict maintenance. This helps avoid vehicle downtimes and adds efficiency, making transportation companies more profitable.
For example, C3.ai (AI 3.52%), the enterprise AI software company, worked with the U.S. Air Force to design a system to optimize fleet maintenance, increase aircraft availability, and avoid aircraft downtime. Commercial airlines and trucking companies are likely to look to predictive maintenance systems as well since the cost of having out-of-service vehicles is significant, especially for airlines.
Will AI disrupt the transportation industry?
Artificial intelligence is likely to have an impact on the transportation industry, much like it will across a large part of the business world.
While generative AI isn't a major part of that disruption, technologies like autonomous vehicles clearly have the ability to unlock billions or even trillions in economic value, and could totally change the way things move from point A to point B.
That transition will take time, but pay attention to the companies mentioned above if you're looking for an opportunity in AI in the transportation industry, as they seem to be the best-positioned to capitalize on the coming disruption.
