The biggest investment opportunities in AI

AI is undoubtedly the most exciting and promising area of automation – it’s the primary driver behind the advances in other areas of automation. As for what actually constitutes AI, it’s fair to say it’s the ability of computer systems to behave in ways that would normally require human intelligence without human interference. Speech and image recognition, machine learning, and language processing are all examples of AI in action.

From predictive Google searches to personalized Netflix movie suggestions and Alexa’s answer to your questions, AI is behind many of our technology interactions – and it’s set to transform almost every industry. Consultancy McKinsey reckons 70% of companies will be using at least one type of AI by 2030, and investment bank Morgan Stanley forecasts the AI industry will generate $1 trillion in annual revenue by 2050.

Who are the key players in AI? The usual suspects in Big Tech are unsurprisingly front and center of the AI revolution: think companies like Apple, Alphabet, Amazon, IBM, Microsoft, and Tesla. AI has helped all these companies enter adjacent and altogether new industries, and thereby blur the distinctions between them (much to competition regulators’ dismay). However, you’d need a crystal ball and a lot of luck to narrow down on just one single winner. Another strategy might be to back companies with indirect exposure to AI. One group of companies that fits the bill are in the semiconductor industry: they sit “upstream” in the supply chain and provide microchips to the aforementioned tech giants. Global leaders in this space include Nvidia, Intel, Micron, and Qualcomm.

Alternatively, of course, you could look to the myriad ETFs and active funds focused on the AI opportunity. A few high-profile funds include the Amundi Stoxx Global Artificial Intelligence UCITS ETF, the Pictet Robotics fund mentioned previously, the AXA Framlington Biotech fund, and GAM Star Disruptive Growth.

In this Pack, you’ve learned:

🔹 Rising competition as well as demanding investors and investors are all responsible for the accelerated uptake of automation – and high profile investors are already betting big on its potential

🔹 Allied Market Research predicts the market for factory automation will grow an average of 9% a year until 2025 – almost triple the rate of the global economy

🔹 Statista forecasts the global robotics market – a major subset within automation – will grow from $39 billion in annual revenue in 2017 to $500 billion in 2025

🔹 McKinsey reckons 70% of companies will be using at least one type of AI by 2030, and Morgan Stanley forecasts the AI industry will generate $1 trillion in annual revenue by 2050

🔹 The automation trend is one you can invest directly in – either by betting on individual companies or by spreading the risk across several through ETFs or actively managed funds