Artificial Intelligence is in our present and future
Monday, April 10, 2023
Hello everyone,
Easter has been and gone for another year and another week of the markets is upon us. What will it be this week – bullish, bearish, sideways, good news is bad news, bad news is good news or news is just news??
Maybe we just need to turn to our A.I device to find out. Is that the future?
So, what is A.I.?
In its broadest sense, A.I. is the capability of machines to simulate human intelligence – to think and act the way that humans do. But we all know that human intelligence incorporates much more than just thinking and acting. Learning is a big part of it. Therefore, for any artificial intelligence to be considered “true” AI, it also needs to be able to learn. After that, it needs to apply what it has learned (by generalizing the knowledge) to solve new problems. After all, humans learn from experience to make better decisions.
Types of AI
Artificial Intelligence is usually grouped into the following two broad categories:
AI Applications or “Narrow” AI
AI Applications are capable of simulating human intelligence in a limited capacity. They can learn or be taught how to perform several specific tasks as efficiently as possible. In fact, it excels when it’s performing a single task, despite being heavily constrained.
AI applications are what we use every day. One of the biggest examples is personal data assistants like Siri and Alexa. These systems are capable of speech recognition and processing of natural language to determine what task you need them to perform.
Artificial General Intelligence (AGI) or “Full” AI
AGI is the type of AI that computer scientists dream of creating. It can simulate human intelligence in the truest sense with the ability to adapt to a multitude of scenarios and solve almost any problems that it encounters. This AI can drive a car, go shopping, balance an accounting book or even fly an airplane.
Currently, this type of AI is rooted in fiction. A good example of AGI would be Data from Star Trek, HAL from 2001: A Space Odyssey and JARVIS from Iron Man. AI analysts believe we are decades away from achieving this level of AI.
If we manage to create AGI, it is predicted that this will give rise to “superintelligence”. This is the type of AI that will surpass human intelligence on every imaginable level, including on the creative and emotional level. One of the downsides of superintelligence is that it will eventually start believing it is better than humans and may try to dominate us. We’ll leave that to future generations to sort out.
Why Artificial Intelligence is Important
AI has a lot of benefits, and these extend to virtually every industry.
A few are listed here:
Making Existing Products More Intelligent
AI is not a standalone product; it is integrated into existing products to make them more intelligent. One area where this is taking off today is the internet of Things (IoT). This is a network of interconnected smart devices that constantly communicate to anticipate human needs with little human intervention.
For example, when driving home, your phone will communicate to your garage that it’s in range so that it opens when you arrive. At the same time, the phone will set the thermostat to a comfortable temperature depending on the weather report it “checked” on the internet. Also, once the phone senses you’re inside your home, it’ll turn on your favourite relaxation music or the TV so you can watch the news.
As AI improves IoT will become better at anticipating your needs to the point human intervention will be completely unnecessary.
Automating Repetitive Tasks
Humans can only perform a task for so long before it becomes boring due to repetition. Boredom doesn’t register in machines. They can deal with the mundane, while humans focus on more high-level tasks that machines can’t do, yet.
So, get your AI to check documents for errors, bill multiple clients for completed projects, send customer onboarding emails, while you plan your next vacation.
Speeding Up Decision Making
Humans can only process so much information at a given time. Stress and tiredness are among the many factors that play a role in our ability to make decisions on time. AI is free from all this reduce and only focuses on what it is programmed to do.
Reduce Human Error
What makes us human affects our decision-making processes and causes us to make mistakes. A well programmed machine will not make mistakes.
For instance, the use of predictive AI has helped reduce human error in forecasting the weather. Businesses and brands have used the same AI to help them identify customers who are most likely to buy them.
Always Available
It’s obvious, isn’t it? Machines don’t need rest. Whether it is lunchtime or 2AM Alexa will always be available to process your queries. It’s also why businesses use chatbots to help customers after business hours.
OK, so, this may sound great, but how do we profit from all these advances in technology?
There is one tech fund capitalizing on the artificial intelligence boom – and beating 90% of its peers this year.
Adam Benjamin, manager of the $9.5 billion Fidelity Select Technology Fund (FSPTX) believes that A.I. is probably the largest technology theme, driver, and disrupter in the next 10+ years.
The mutual fund is up 22% in 2023, outperforming the Nasdaq Composite, which has risen 15%. It also has a solid long-term track record, racking up a 15.7% annualized return over the past 15 years that puts it in the 10th percentile, according to Morningstar.
Companies that rushed to embrace digital transformation during the pandemic continue to seek ways to improve efficiency through large language models like ChatGPT enabled by A.I., Benjamin said. He goes on to say that the biggest facilitator in the industry is no doubt, Nvidia.
Benjamin says that Nvidia is the single largest beneficiary by a wide stretch in terms of A.I. The chip stock is the Fidelity fund’s third largest holding with a more than 8% weighting.
Nvidia shares have rocketed 84% this year, boosted by their biggest quarterly gain since 2001. Benjamin says Investors grew bullish on Nvidia’s A.I. vision, while also viewing the inventor of the graphics processing unit as one of the chip manufacturers best positioned to endure an economic slowdown that’s already hurting personal computer and wider semiconductor sales.
Other semiconductor names among Fidelity Select Tech’s top holdings include Marvell Technology, NXP Semiconductors, ON Semiconductor, and GlobalFoundries.
The fund is rated four stars by Morningstar.
A.I. is all around us and improving all the time. Use it wisely.
Have a wonderful week. Don’t forget to do something that doesn’t involve A.I.
Cheers,
Jacque
