Page 28 - Investment Advisor July/August 2023

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ChatGPT: What to Know Now “Four or five years ago, artificial intelligence was seen as
more of a niche or thematic investment,” says Mike loukas,
While the tech industry has been excited about innovations principal and chief executive officer of TrueMark Investments.
in artificial intelligence (AI) for years, the introduction of the “Now it’s permeating so many levels of business and society
consumer-facing ChatgpT has prompted far more interest and our everyday lives. As it becomes a more useful tool for
among the broader public — including investors. “ChatgpT businesses, I think the B2B application is going to become a
really struck a chord with the public because it was usable and more important component of investment portfolios.”
intriguing in a way that was novel and new,” says Ryan Jacob, Artificial intelligence has the potential to be a good investment,
portfolio manager of the Jacob Internet Fund. but it’s important to understand that it’s a very young industry. For
But while it’s clear that AI applications have the potential that reason, it’s difficult to determine with much certainty which
to dramatically accelerate the pace of technological change stocks might benefit the most from AI capabilities.
and disruption in many industries, the best way to invest in That said, most large tech companies are investing in AI,
the burgeoning AI industry is more nuanced. If your clients are seeing dominance in the category as key to maintaining a
asking about investing in AI, here’s what you need to know to competitive advantage. The challenge for investors, of course,
respond intelligently. is determining which companies will gain (or lose) the most as
Artificial intelligence uses computing power to simulate AI matures.
human thinking to solve problems or complete tasks. ChatgpT
is a form of “generative AI,” which means that it not only ana- Heating Up
lyzes data but uses its predictions about that data to “gener- The introduction of ChatgpT to the public on Nov. 30, 2022,
ate” something. In this case, it uses AI to answer questions sparked a rise of interest in AI. But the increased interest may
using data gleaned from millions of pages on the internet. also reflect ongoing volatility in the tech markets, which has
It does not actually “know” anything, but it can predict the many investors looking for the next big innovation that will
answers to questions using its understanding of the relation- drive growth in the sector.
ships between words. Microsoft invested $1 billion in OpenAI, the creator of
However, there are many other use cases for AI and deep ChatgpT, in 2019 and is also heavily investing in building AI
learning models beyond simple, text-based responses. AI is capabilities and tools into its Bing search engine. And while
part of the technology powering innovation in self-driving cars google’s AI tool, Bard, has gotten off to a more rocky start after
and cloud computing, and machine learning could be used generating incorrect answers in a demo, the search giant’s focus
for everything from physicians looking for assistance with a on AI illustrates the importance of the technology.
patient diagnosis or treatment plan to uncovering cost savings As more consumers and businesses transact online, there
at a manufacturing plant. are increasing opportunities to incorporate the technology

26 InvesTmenT ADvIsor July/August 2023 | thinkAdvisor.com