J&J(US:JNJ) The Good Investors·2026-02-15 01:00Group 1: AI in Legal and Medical Fields - AI tools for contract review in regulated environments like clinical trials and financial services must meet high reliability standards, as any missed clause can lead to significant liabilities [3][4] - A comparison between AI systems shows that a purpose-built system (TCN) made 163 substantive changes to a clinical trial agreement, while a general-purpose AI (Claude) made only 11 changes, indicating a significant performance gap [5][8] - The complexity of clinical trial agreements exacerbates the limitations of single-pass AI systems, which struggle to manage multiple provisions and regulatory contexts simultaneously [6][8] Group 2: AI in Medical Devices - The integration of AI into medical devices, such as Johnson & Johnson's TruDi Navigation System, has led to a significant increase in reported malfunctions, with at least 100 adverse events reported since AI implementation [12][13] - Legal actions have been initiated against Acclarent, the distributor of the TruDi system, alleging that the AI component contributed to surgical errors and patient injuries [14][15] - The FDA's regulatory framework for medical devices does not require extensive testing for AI-enabled technologies, raising concerns about their safety and effectiveness [17][18] Group 3: Economic Implications of AI - The rapid development of AI technology is expected to flood the market with new software solutions, potentially leading to a commoditization of software and a decline in the value of companies unable to innovate [19][20] - Historical trends indicate that while earnings may remain stable in the short term, disruptions from AI could take longer to manifest, similar to the decline of newspaper stocks despite initial earnings growth [20] - The relationship between productivity growth driven by AI and median wage growth raises concerns about rising income inequality, which could be addressed through income redistribution policies [30][32]