From Warren Buffett to Mark Cuban, there is no shortage of believers in the realm of deep learning, or artificial intelligence (AI). As a matter of fact, those same technology giants of the past may actually be the best place to begin your AI investment search.
Deep learning is a subset of AI that is experiencing explosive growth. According to Persistence Market Research, deep learning will generate approximately $261 billion by 2027. A staggering annual growth rate of 49% compared to today. Let’s look at some of the largest players in the industry.
Recognize any of these names? It may seem like déjà vu that these venerable tech companies are back in play in part by the lure of AI dominance. AI start-up companies both domestically and abroad are being bought up by these larger players, in part for expertise in new technology, and also as a result of friendly merger and acquisition tax benefits.
So for those of us who don’t hold a graduate degree in computer science from MIT, starting your research with the larger companies mentioned above is a great beginning. You can also segway into this market through various ETF’s and mutual funds who are investing in this technology. ETFdb.com provides a recent list of such ETF’s:
For those who have an appetite for the less ubiquitous, research firm CB Insights has populated a list known as “2018 A.I. 100.” This is a list of the most promising AI startups globally. With that said, 76 of the 100 listed companies are US based.
Let’s summarize. It appears to be a foregone conclusion that artificial intelligence and deep learning will not only affect the world around us by introducing such wonders as self-driving cars, digital assistants and voice-controlled smart speakers, but will present perhaps the next big ticket investment opportunity. We can simplify our investments into 3 broad categories:
- Large Cap Tech: Behemoths like Amazon and Microsoft are names we are familiar with and will lead the charge in the upcoming AI revolution.
- ETF’s and Funds: Let the professionals pick the likely profitable players and invest via one of their funds. Do your due diligence here as you would in selecting any ETF or fund.
- Invest in Startups: Obviously the most risk inherent of the choices. As with any volatile and infant market cap company, it is prudent to invest (speculate) with money that you are able to do without.
So whatever investment style suits you, there is an opportunity to participate in this high growth technology. Also be of mind that while what may benefit one industry, may be detrimental to another. Artificial intelligence will likely change the workforce as it marches forward. Jobs like accountants, Wall St. traders, and truck drivers all face the possibility of extinction. But that is an entire story for another day…