So far, we think AI is a net benefit for these companies as it improves the customer experience and demand for their services. AI allows these companies to add more features to the solutions they provide, and helps their customers become more efficient. As a result, these companies continue to grow strongly without any meaningful change in the competitive landscape. And so far, the management of those companies have not indicated any meaningful impact on their businesses that is due to AI.
For KSI specifically, the fact that its customers are large, well-capitalized entities always represents the risk that these pharmaceutical and biotech companies are incentivized to develop the solutions in-house to save costs. However, that situation is unlikely as software solutions are not the expertise of those healthcare companies, and building it in-house only makes sense when the solution provider, like KSI, implemented “price-gouging” to its customers, which we don’t think is the case.