If I invest in AI companies, will I become rich?

[ISamson]

I have been reading a fool.com report on the AI financial BOOM:

Stephen Hawking is sounding the alarm on what could be a trillion-dollar technology. In fact, he’s saying it could be “the biggest event in the history of our civilization.”

And when noted genius Stephen Hawking speaks, it pays to listen.

Everyone knows Stephen Hawking is one of the most brilliant scientists in history. But what many don't know is that he's also a multimillionaire. He got his reputation (and his money) simply by being one of the smartest men in the world.

After clicking on the "No, I want to learn more." link on the bottom of the tease article and after entering your email, it will give you a video to watch on the topic and some more information by email. Do not hesitate to click on link.
Thank you.

 

[StoneTemplePython]

There are a lot problems with this.

The most fundamental is: just because a technology is a big deal, doesn't mean that investors will / should make any money off it.

Loosely speaking if there is a major technological innovation, there is some new efficiency and that creates a surplus. The surplus can accrue to some mixture (i.e. convex combination) of company owners, company employees, consumers, government.

Buffett had a big writeup on this during the dotcom boom, pointing out that airplanes were one of the biggest, if not the biggest game changing tech innovation in the 1900s, yet in their first hundred years, owners had accumulated negative returns. (He had a quip about shooting down the plane at kittyhawk to do capitalists a favor.) That's prong one.

Prong two: some AI companies could make a ton of money... but which ones? And why do you think you would be involved with them?

 

[Vanadium 50]

Maybe I'm being ageist, but I don't think it's a good idea for children to be giving adults financial advice.

 

[ISamson]

Maybe I'm being ageist, but I don't think it's a good idea for children to be giving adults financial advice.

I am trying to discuss something interesting that I came across. It was interesting to hear an opinion of educated people on the topic. I am sorry if I offend anyone, but I did not intend to give anyone any advice they do not wish.

 

[ISamson]

The most fundamental is: just because a technology is a big deal, doesn't mean that investors will / should make any money off it.

This AI technology will be utilised by everyone. Any company that ignores it will not stay competitive on the market, similar to the internet boom.
AI will be used by everyone from the companies to detect weaknesses in their systems to self-driving transport. Any major technology company that develops such technology will make billions, because sooner or later it will affect every single person.
That's my opinion.

 

[StatGuy2000]

This AI technology will be utilised by everyone. Any company that ignores it will not stay competitive on the market, similar to the internet boom.
AI will be used by everyone from the companies to detect weaknesses in their systems to self-driving transport. Any major technology company that develops such technology will make billions, because sooner or later it will affect every single person.
That's my opinion.

Yes, it is true that AI technology will be utilized by everyone, and will have broad applications (we already have companies that are conducting research in or investing in AI systems and software).

However, that does not mean that a given AI company will necessarily make money. In a competitive market, there will be winners and losers, and there is no doubt that some AI companies may not necessarily survive, going bankrupt or being acquired by larger competitors like Google, Apple, etc. So one needs to be judicious in deciding where to invest in AI firms, the same as in any other industry.

 

[russ_watters]

I have been reading a fool.com report on the AI financial BOOM:

After clicking on the "No, I want to learn more." link on the bottom of the tease article and after entering your email, it will give you a video to watch on the topic and some more information by email. Do not hesitate to click on link.
Thank you.

Fool . Com does clickbait marketing scams. So the answer to the title question is no; if you invest based on that you are unlikely to make money investing in AI.

 

[ISamson]

Fool . Com does clickbait marketing scams. So the answer to the title question is no; if you invest based on that you are unlikely to make money investing in AI.

The article on the website simulated me to think on the topic and it seemed pretty reasonable to me.

 

[Vanadium 50]

A century ago automobiles looked like a promising technology, and they were. Would you have recommended that people invest in Stanley, Overland and Buckmobile?

This is why it's a bad idea to be giving financial advice until you've had some, you know, experience.

 

[russ_watters]

The article on the website simulated me to think on the topic and it seemed pretty reasonable to me.

Ok, fair enough. So here's a more detailed take:

With that article as an example, AI is not a company; it's not even a technology -- it is an essentially meaningless clickbait buzzword. Companies will add it to their name or business mission to entice poorly thought out investment like they did with ".com" and are doing with "blockchain". And that makes by-name investment in AI an extremely risky and generally poor investment.

Now, how can I say that "AI" is not a technology? It's because it doesn't have a clear-cut definition and as a result there is no way to judge any particular technology/product/company as being "AI" or not. No clear definition? Really? Really. See these candidates from the wiki article:

1. Intelligence displayed by machines.

2. Any device that perceives its environment and takes actions that maximize its chance of success at some goal.

3. Colloquially, the term "artificial intelligence" is applied when a machine mimics "cognitive" functions that humans associate with other human minds, such as "learning" and "problem solving".

4. "AI is whatever hasn't been done yet."

All of the first three apply to my thermostat and the fourth is a half-kidding point about the marketing/clickbait aspect. And none of these definitions include what I think is the real colloquial vision: computers that behave like and can interact with humans in a way that makes them hard to identify as computers.

If AI is computers acting like humans, I'm not sure that is actuallyt even a good/useful thing. It's limited to things like making the voice prompts better when you call your insurance company's computer on the phone. Most of what makes computers and people different from each other makes computers much, much better at overlapping tasks. Giving computers traits to make them behave more like humans (emotional/illogical, with poor memories and biases that result in poor decisions) is generally undesirable because it reduces the benefits of computers. As a result, I'm not seeing a real/broad investment opportunity under that definition.

If we go with a broader definition like #2, then "AI" is just intelligent automation, which has been around and gradually expanding for 50+ years. If you want to invest in that, sure. There are two avenues:

1. Companies that make the components (Allen-Bradley, Honeywell, Schneider, etc.). These might be a good investment.

2. Companies that use it or develop their own for certain tasks.

#2 are just random companies, and their fortunes are unlikely to be made based on their use or lack of use of automation. For example, Tesla is working on self-driving cars, but whether it lives or dies is unlikely to be determined by that, but rather whether it can make quality, affordable cars to compete with GM and Toyota (who will also make self-driving cars).

 

[russ_watters]

...also, I read the linked article just to make sure it was what I suspected: yes, it is a clickbait, stealth advertisement masquerading as a news article. I particularly despise this from fool . com because it was my understanding that at one time it was a legitimate investment news/blog site. Now it appears they are mostly just writing clickbait articles to entice people to buy stock tips. I assume this link came from a legitimate news site, formatted exactly the same as the other news stories on the page, except under the header "Paid Partner Content"? I see their content on CNN a lot. You must be very careful with such links, and I feel like for selling investment advice, this tactic is particularly unethical.

 

[PetSounds]

I have been reading a fool.com report on the AI financial BOOM:After clicking on the "No, I want to learn more." link on the bottom of the tease article and after entering your email, it will give you a video to watch on the topic and some more information by email. Do not hesitate to click on link.
Thank you.

Funny, I saw a click-bait ad the other day saying exactly the same thing, but quoting Bill Gates.