Why and how to invest in Artificial Intelligence (AI)
Artificial intelligence is a transformative trend, and with any new change this big, we start off in uncharted waters. What can this new technology actually do for us? How can we spot enterprises which create real value with AI?
Learn why a growing number of investors see AI as a major asset. To quote Benjamin Franklin, author of “The Way to Wealth”, the very first American book on personal finance (1758):
An investment in knowledge always pays the best interest”.
Nine points to keep in mind.
1. AI: two investment opportunities
You can invest in:
- trailblazers who are developing and marketing ready-to-use AI technologies
- forward-looking firms who are already using AI to radically boost performance
2. AI is not as new as it seems
The concept of artificial intelligence actually dates back to 1950, with Alan Turing, an English mathematician and early computer scientist, known for the Turing Test, whereby a machine could be considered “intelligent” if someone conversing with it could not tell it apart from a human being.
AI was recognized as a scientific field as early as 1956, at the Dartmouth Workshop, a research project funded by the Rockefeller Foundation, bringing together scientists and mathematicians to brainstorm for the first time on “thinking machines”.
3. AI is becoming indispensable in business
Artificial intelligence processes big data to give us a much deeper understanding of the world around us. The bigger the data, the higher the performance.
Advances in calculators and growth in the volume of data available have been developing AI capacity exponentially. AI gives meaning to big data, enabling businesses to perform highly complex analyses of customer behavior.
4. AI is not really “artificial”
The term “Artificial Intelligence” is misleading. Patrick Winston, an American computer scientist, explains that: Artificial Intelligence is the study of ideas that enable computers to be intelligent.
AI is a tool which uses powerful mathematical techniques to enhance human ability.
5. AI has already made great strides
Many experts are calling artificial intelligence the “fourth industrial revolution”. First came steam power in the 1800’s, the second: industrial production in the 1900’s, and the third: the information revolution in the 2000’s. This is the dawning of the age of AI.
Sundar Pichai, CEO of Google says: “AI is probably the most important thing humanity has ever worked on. “I think of it as something more profound than electricity or fire.
Jeff Bezos, CEO of Amazon says it this way: “It’s hard to overstate how big of an impact AI will have on society over the next 20 years. It is big.”
6. AI is an acceleration marker
It is said that “Sixty percent of all trades on Wall Street are executed by AI with little or no real-time oversight from humans.”
The AI revolution is a global phenomenon in an increasingly interdependent world, and top-performing companies are already exploiting the disruptive quality of artificial intelligence.
Silicon Valley tech advisory firm Constellation Research predicts that the artificial intelligence market will surpass $40 billion by 2020.
7. Some business sectors are getting more out of AI
Gartner, a leading technology consultancy, states that “By 2020, customers will manage 85% of their relationship with the enterprise without interacting with a human.”. AI is in the early stages of transforming business, but is already impacting a number of sectors, including banking, transportation, healthcare and industry.
According to PricewaterhouseCoopers, this translates into greater productivity and a better bottom line. Today, it’s no longer the size of the company that matters most, but its capacity to adapt and innovate.
8. AI augments human capacity
The purpose of AI is to relieve people of tedious tasks so that they can focus on creating added value. AI boosts efficiency by empowering people to put their talents to work for the company. AI enhances different occupations by making them more interesting.
Sidetrade’s vision is not a world where machines compete with people, but where machines heighten human capacity. For us artificial intelligence is something of a misnomer; we prefer to speak of augmented intelligence.
9. Sound investment in AI requires human decision-making
Investments in AI are booming. Patent applications in the field are soaring. The U.S. counts 20 times more AI startups than four years ago. According to Gartner, 50% of analytic applications will have artificial intelligence functions within the next five years.
And according to Market research consultancy Forrester, artificial intelligence solutions will drive your pipeline if you are an intelligent buyer and user of predictive marketing analytics.
Finally, here’s some wise advice from The Motley Fool, a renowned financial services company:
“Many tech investors are often looking for disruptors that can upend the status quo in a particular industry. But with AI, the market is still so young that it’s best for investors to focus on which companies are leading in the space right now”.
Disclaimer: this article is provided solely for information and should not be considered formal investment advice.