WHAT IS THE FUTURE ROLE OF ARTIFICIAL INTELLIGENCE?

11.05.2023 The capabilities of the ChatGPT large language model represent a step change in Artificial Intelligence (AI) technology. Below we look at the future role Artificial Intelligence is likely to play in the economy.

AI is a group of many different technologies working together to enable machines to comprehend, act and learn based on a data set. It is advancing rapidly, so much so that ChatGPT was able to sit and pass the American bar exam.

Our investment thesis is that AI will increasingly be used to do the grunt work that humans currently undertake. For example, radiographers will be able to use AI to analyse run of the mill X rays and scans, thus freeing them to look at more complex cases. Another interesting use of the technology is the renewal of UK passports. The AI currently checks each individual applications and if the required criteria are met the passport will be renewed, otherwise it will be referred to an individual to follow up.

As AI increasingly takes over the grunt work that humans currently do its addressable market is expected to grow rapidly in size. This makes it a potentially attractive area for investment.

For the reasons outlined above we think that it is important that portfolios focused on capital growth have a meaningful exposure to AI. As it can be very hard to identify the individual stocks winners, especially in the technology sector, we prefer to invest via technology mutual funds. This spreads the risk by investing in a portfolio of such stocks.

For information only. Investors should seek professional advice for their own circumstances before making an investment.

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This post was written by Robin