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From Banks to Utilities, AI is driving Latam's digital leap

Latin America has been experiencing widespread adoption of artificial intelligence (AI) tools, which has been reshaping its business environment and emerging as a cornerstone in some investment theses across the region. We assessed 15 sectors and over 60 companies to evaluate how Al currently influences day-to-day operations and its long-term impact in strategic planning. Our analysis concluded that Al adoption is effectively assisting LatAm in narrowing the digital gap to developed markets. Predominant use cases involve optimizing marketing and sales, IT and processes automation, and threat detection. The sectors experiencing the most significant Al-driven transformations include financial services, retail, education, healthcare, and IT.

3 dimensions to assess AI impact: Revenue, Profitability and Competitive Moats

In our Al scorecard for LatAm companies, we evaluate impact across three critical dimensions: Revenue, Profitability, and Competitive Moats. Financial Services (Banks and Non Banks) and Healthcare experience significant transformation across all three dimensions. Sectors like Beverages and Agribusiness may not see their competitive moats fundamentally altered by Al, but their profitability potential could be substantially enhanced. We identified Real Estate, Construction & Cement, and Commodities as the sectors least disrupted by Al adoption (though we detail numerous applications already in use within these industries). Across all sectors, the most valuable Al benefits are accelerated decision-making processes and reduced time-to-market for new products, enabling companies to respond more quickly to market changes and customer needs.

Large barriers to adopt AI in LatAm, but consumers are highly digitalized

Al adoption in LatAm faces several barriers, including infrastructure gaps, high implementation costs, talent retention challenges, and regulatory uncertainty. The region's low level of digital maturity remains a critical limitation but also presents opportunities for companies to take servers to the cloud. Despite these hurdles, Latin American consumers are fast digital adopters, with rates comparable to those in the US and China. However, since 2019, the region has consistently lost more Al specialists than it has attracted, exacerbating the talent gap. Additionally, the upfront investment required for Al projects and the lack of a clear regulatory framework further slow adoption across industries.