The Birth Of A Tech Revolution

The Birth Of A Tech Revolution

11 months ago3 mins

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There’s an ironic parallel between us humans and artificial intelligence (AI). Right now, we’re witnessing the birth of AI, and like our own births, it’s messy, scary, and wondrous all at the same time. And it’s just the beginning…

🕰 Recap

  • Goldman Sachs dropped a big artificial intelligence (AI) thought piece this week. And it included some bold predictions. Read our story
  • On Tuesday, chipmaker Micron used its results to remind us that one particular industry’s pinning a lot of hopes on the new technology. Read our story
  • Meanwhile, the electric car price war in China supercharged BYD’s sales in January and February, but left Tesla in the dust. Read our story

✍️ Connecting The Dots

OpenAI – the firm founded by Elon Musk, Peter Thiel, Jessica Livingston, and other tech heavyweights – released its first generative pre-trained transformer (GPT) in 2018. And now, barely five years on, it’s unleashed ChatGPT and GPT-4 into the world.

To say these models are making waves would be an understatement of colossal proportion. Predictions as to AI’s influence range from a utopian-like world of clean energy and enormous wealth creation, to literally the end of humanity. And with two of OpenAI’s founders at loggerheads about the speed of the technology’s development (Elon Musk is calling for a six-month time-out, while OpenAI’s CEO is saying slow and steady wins the race), it feels impossible for regular folks to know what to think.

But when it comes to investing, maybe the finer details don’t matter. Anyone with a level head will tell you that AI’s going to be big, and firms in the right place at the right time are bound to profit from either selling the technology or using it. Right now, the attention’s on the former, with companies like Microsoft and Nvidia in the spotlight, but eventually, the firms that successfully use AI will rise to the surface. And that’s good news for sensible investors who are nervous about rushing in: they can sit back and watch how it all unfolds, and still cash in down the line.

🥡 Takeaways

1. Highs and lows.

There’ll be winners and losers along the AI journey, but one thing most analysts seem to agree on is that proliferating AI will require an awful lot of high-powered, semiconductor-guzzling computers. Some chipmakers are better positioned than others, of course, but the industry as a whole looks like it might be in a sweet spot. No wonder, then, that the iShares Semiconductor ETF’s up nearly 30% this year.

2. Snooze you lose.

One headline from Goldman’s big AI report was that some 300 million jobs could be disrupted by AI-driven automation. That doesn’t mean 300 million more unemployment claims overnight, but it does suggest that AI’s going to pop up on the agenda of most business leaders’ strategy meetings. Now, in previous technology revolutions, it was blue-collar workers caught in the headlights (think: farming or auto manufacturing). This time around, it looks like desk-dwelling white-collar workers could face the biggest risks. So it’s probably not too early to get ahead of the game with some serious AI upskilling.

🎯 Also On Our Radar

Maybe it's AI’s potential to help solve big climate problems that has European policymakers feeling motivated. They’re plotting a chunky raise to the bloc’s clean energy targets, proposing that renewables make up 42.5% of the region's energy consumption by 2030. That’s a pretty big uplift on the current 32% target.

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