If you’re like me, you’ve probably tried your hand a time or two with the new AI ChatGPT to see what it might be able to do for you.
It did everything from helping me research article topics to diagnosing why I am lightheaded all the time. In regard to its writing capabilities, they are somewhat like that of a high school freshman. The topic is there, but the detail is lacking. Diagnosing illness was somewhat like the Mayo Clinic online.
All the information was there, but it didn’t really do any conclusive analysis. The one thing that is utterly amazing is the speed. Within seconds practically any search is compiled and presented in any manner of forms that you prefer, from lists to paragraphs to essays. There is no doubt in my mind that there will be enormous use cases for this technology, probably most of which are yet to be determined.
Microsoft plans to invest $10 billion in OpenAI, the startup behind the popular ChatGPT tool. The deal is part of a funding round with other investors involved that would value OpenAI at a whopping $29 billion. Google, of course, is also involved in the AI technology with its chatbot Bard.
Hollywood was even ahead of the curve with AI technology in movies like Star Wars, The Matrix, and even The Terminator. With billions of dollars pouring into the industry, the only question that remains is how does one profit from this coming storm? There are more players in this space than you might have thought.
According to the International Trade Administration, AI global funding doubled to $66.8 billion last year, with a record 65 AI companies that reached $1 billion-plus in valuations. You won’t be alone in trying to find the next Google of the internet or Tesla of electric cars. From big to small, there are numerous investors, from buy-side funds to corporations themselves. Statista lists a few, including Intel Capital, which has made some 51 investments in AI.
If you’re sold by now, there are a couple of ways to invest.
Probably the easiest and most diversified way for smaller investors is through ETFs that focus on AI. The sector is seeing both growth and increased specialization, such as the combining of AI with robotics or automation.
According to Lisa Chai, a partner and senior research analyst at ROBO Global, which operates the ROBO Global Artificial Intelligence ETF, “Because it is still early innings in terms of AI adoption, we think it is better to look at the long-term view with diversified exposure to various sectors.” The Motley Fool likes the following four AI ETFs to buy in 2023:
AI ETF ASSETS UNDER MANAGEMENT EXPENSE RATIO
Global X Robotics & Artificial Intelligence ETF $1.35 billion 0.68%
ROBO Global Robotics and Automation Index $1.20 billion 0.95%
IShares Robotics and Artificial Intelligence ETF $231.08 million 0.47%
First Trust NASDAQ Artificial Intelligence ETF $193.52 million 0.65%
Selecting one or more of the stocks in this emerging world is another option depending upon your financial position. Several of the larger brokerage firms offer what they call slices of shares of some of the larger tech names that can also help you leverage and diversify into the category. AI technologies are emerging in virtually every industry, from agriculture and banking to transportation and entertainment. If you want to diversify among the three main categories of AI, which are basically algorithms (software), processing power (chips) and data sources and use cases, you could look at a few household names like the following:
Alphabet Inc. ($GOOGL)
In addition to its chatbot, Alphabet recently purchased the AI startup Alter for $100 million. Alter is an avatar startup that helps creators and brands express virtual identities.
Microsoft ($MSFT)
It goes without saying that ChatGPT and Microsoft are currently the hot players in the space. Microsoft also has Azure, an AI platform that allows companies to create innovative AI services.
Palantir Technologies Inc. ($PLTR)
Palantir is a smaller growth company that uses AI tools to help people make decisions based on better data analysis.
Lemonade ($LMND)
Lemonade is an insurance company that utilizes AI by allowing its customers to interact with its AI bot called “Maya” which will help you with every step of the insurance process, from signing up for a policy to filing a claim. This has the ability to seriously reduce the workforce in the industry.
Workday, Inc. ($WDAY)
You’ve probably seen the plethora of commercials from Workday recently. Workday believes that AI is changing the way companies use HR analytics. The company helps larger firms with AI-powered and cloud-based HR services.
While it may be tempting to jump on the AI bandwagon, investors should ask themselves some key questions first. Investors need to look at where AI is being used effectively, what building blocks are needed to support that growth, and, ultimately, what business models show the potential to be profitable.
Original article: https://investingand.money/2023/02/profit-from-chatgpt-and-the-ai-storm/
