JPMorgan warned that rapid growth in artificial intelligence is no guarantee of sustained earnings increase — and could leave many companies at risk. The Wall Street bank said that the rise in companies using generative AI, the technology made popular by OpenAI’s ChatGPT, will boost productivity and deepen customer engagement. But it cautioned that if the underlying AI technology is similar, the expansion of generative AI (GenAI) use could erode product differentiation and pricing power among currently competitive companies. It also noted that some companies are already anticipating deflationary pricing pressure. “We foresee the democratization of the GenAI driving productivity gains for enterprises and deeper customer engagement. However, this does not guarantee sustained earnings growth and [return on equity] expansion,” JPMorgan analysts led by Ranjan Sharma wrote in a note to clients on Aug. 9. “We believe product differentiation and defensible economic moats will be crucial for the benefits of GenAI to accrue to shareholders.” According to JPMorgan, AI costs are also expected to continue dropping in light of lower computing costs and the development of more open-source AI models. Sea The investment bank’s analysts named Sea Ltd , a New York-listed tech conglomerate headquartered in Singapore, as a company whose profit margins are at risk of falling. The company owns the e-commerce platform Shopee, the fintech platform SeaMoney and the game development studio Garena. JPMorgan said Sea could cement its e-commerce and fintech leadership through more personalized recommendations and better financial products. However, its gaming business faces increased competition as AI reduces barriers to game development. “In our view, SE’s gaming business could face increased competitive risks as GenAI reduces barriers for entry in game development. GenAI is driving significant productivity gains in content generation,” the analysts said. “In our view, this will likely drive growth in studios and increase game launches.” TDCX The investment bank also named TDCX , a Singapore-headquartered business consultancy listed on the NYSE, as a stock at risk. In discussing the potential impact of AI on the business support industry, JPMorgan said TDCX appears most vulnerable to price deflation and automation. “Our analysis indicates that TDCX appears most at risk from price deflation and automation unless they are able to offset the GenAI headwinds by pivoting their business and/or gaining market share,” the analysts added. — CNBC’s Naman Tandon contributed to this report.