'Winners and Losers' in the World of AI

— Modified slightly September 29, 2026 —

I have often mentioned ‘Winners and Losers’ in past blogs and speeches. It is an important time to revisit the subject, since, like it or not, Artificial Intelligence is revolutionary. And, after all, history shows that after Hiroshima and World War II, we eventually worked out a stalemate on nuclear weapons with Russia. Remember, if you know how to play the game, Tic-Tac-Toe has no winner on either side. Arguably, AI will be harder to control than just two Superpowers becuase it may be much easier to access for bad purposes. Read on please.

We see ‘Winners and Losers’ in all walks of life—society, business, sports, etc. The latest AI has been compared to other Industrial Revolutions, such as railroads for transportation, the light bulb for 24-hour work, computers, and now robots for 24 hour work, new energy sources, and incredibly fast changes as semiconductor chips bring faster speeds, cheaper power, and more risks. Let’s compare a few facts to help us wade through these potential changes and when and how they might affect us personally and in business - often together at the same time in family-run businesses.

U.S. Economy

Huge Winner now. Real GDP growth is likely around 5% in Q3 2026, which is also being reflected in the EU and Asia, but generally at lower growth rates. Clearly led by AI-related capital spending, but also showing up with decent consumer spending and overall low unemployment.

Worry is a Loser later, because inflation and therefore interest rates at all ends of the yield curve are increasing, leaving monetary policy everywhere in a dilemma and at risk of killing the economy. Monetary policy always acts with a lag, and most countries have had very easy policies to support deficits and AI spending, which includes very expensive military goods. Furthermore, Geopolitics complicates every decision. The growth wealth effect is very unevenly distributed between the ‘live by each paycheck’ consumer versus the stock market/real estate owning consumer.

Hyperscalers

Winners such as Meta (Facebook), Google, Amazon, Netflix, Nvidia, etc., have had near monopoly pricing with gross profit margins as high as 75% because they were first to reach scale volumes. Interesting to note that both Anthropic and Open-AI have not issued their respective IPO's as yet, but both reduced their subscription rates by 50% last week!

Competition will expose Losers over time for those who choose the wrong products, the wrong partners, the wrong suppliers, and now with expensive data centers and infrastructure costs, the wrong financiers! Semiconductor chip technology changes AI quickly. Yes, even powerhouse Tesla and Space-X face new challenges all the time.

Health Care

A huge Winner. Hurray.

Losers will be some health care workers’ jobs. But maybe related services could improve, such as home health care.

U.S. Dollar

Solid Winner for now as our huge fiscal deficit and higher Government interest rates continue to attract foreign funds to support us, the leader of the Free World, including AI so far. China is doing very well in this race as the only other close competitor, as they produce goods less expensively.

A Loser later possibly if our economy slows sharply. It already has been showing up in housing and automobiles and a number of consumer items, some of which c-stores sell in huge volumes.  A loss of confidence in the Dollar would also increase risks of higher interest rates, further adversely affecting our economy. Our economy also seriously lags in clean energy, and perhaps in crypto-related security and technology. Texas just recently has completely stopped new data center approvals until the State reviews AI’s impact on required power energy and water balances. About two years ago, some Texas communities advertised to come and use cheap power for bitcoin mining.

Retail Petroleum Industry

We have been a clear Winner as high and often volatile price changes help the industry to average fuel margins and help offset serious gasoline volume losses. Our very strong U.S. refining industry has done an excellent job keeping retailers supplied, but war impacts have created a delicate supply balance and raised prices significantly, resulting in increasing work from home, more fuel-efficient vehicles, and general affordability issues.

The Losing aspect is that the high prices have impacted demand perhaps too seriously - never good in any business. Diesel sales used to help until retail prices shot over $6.00 per gallon, with widening diesel refining margins alone affecting more than $1.50 of that price impact. Retail margins vary considerably by region based more on local competition, and some retailers have significant buyer bargaining power with volume.

C-Store Industry

A huge Winner, again helped by inflation, but not without a toll on unit volumes. Never good, long term. Fortunately, critical items such as cigarettes have discovered popular nicotine related items to offset. Perhaps other unhealthy snacks and beverages will get better and tastier in time to justify their often premium pricing. I still like Whole Foods, or Whole Paycheck as it is sometimes called, but it seems more difficult to get fresh fruit or even Idaho potatoes at any price.

Foodservice

Huge Winners for the successful companies. Like in so many other industries, scale is critical. Some of the better companies can achieve 65% gross profit margins after counting waste, which is why I believe our industry is going through its own third Revolution. Some say their sales are down because of the soft economy, but don’t feel sorry for the successful ones.

Expenses

Mostly Losers.  Fortunately, labor has gotten more available, but remains expensive for quality help, and so turnover remains high. Other expenses like insurance, repairs and maintenance, and occupancy costs including taxes sometimes face double digit increases. AI holds promise for improvements in some of these categories.

In summary, CONVENIENCE remains a very viable and essential industry, and we are most fortunate to have huge Federal tax incentives to help offset many of the above soft spots in profitability that are often not significant in other industries. We also have the flexibility to operate in multiple classes of trade from company-owned and operated to dealer-owned and operated with multiple options in between, if you have that overhead structure and financial flexibility to prosper. And, as in my last blog, multiples may still reach 12x for quality chains with today’s step-up depreciation tax structure, but buyers are clearly being more cautious than before.

Call if you have any comments or questions.

Jeff Kramer

jeff.kramer@nrc.com

(303) 619-0611