Artificial intelligence (AI) is already changing the way people live and companies do business – our AI-enabled Alexa device make it easier to listen to music or book appointments in our calendar, for instance – but we’re still a few years away before the full promise of AI is realized.
“State-of-the-art of AI isn’t near where people think it is,” says Mark Schmehl, manager of the Fidelity Global Innovators Class fund, which invests in companies that develop disruptive technologies. “The things we can do with it are astonishing, but they’re limited to specific types of problems.”
Still, investors who want to own the technology companies of the future shouldn’t wait around. There are ways to take advantage today, says Mr. Schmehl, but people need to be discerning.
AI promise
Much of the AI that’s being used today is essentially amped-up data analytics. AI-enabled supercomputers can sort through vast amounts of data faster and better than any human can. As important as that may be, that’s not the breakthrough people have been waiting for.
Mr. Schmehl wants to see AI that can execute tasks using predictive learning, which is where the computer will be able to learn new things on its own and then adapt its processes, just like humans do. This is happening in smaller ways, such as with Google.cat, which is software that allows Google’s search engine to recognize real felines in its YouTube content as opposed to a human dressed as a cat for Halloween, he says.
The real game-changing tech will come when AI can solve critical problems that are holding back other innovations, such as self-driving cars or certain health-care treatments. “Maybe in five years’ time you will see predictive AI,” he says. “But what we have right now is machines crunching enormous amounts of data and finding correlations humans can’t see.”
Pay attention to innovations
While it may be awhile before AI becomes a disruptive force, investors and their advisors should be paying attention to this technology’s evolution. According to an MIT Sloan Management Review study, 85 per cent of executives said that AI will give their business a competitive advantage.
Additionally, data from Statista, a research aggregation site, points to the industry experiencing rapid growth over the next seven years, expanding to $32-billion in revenues in 2025 from about $1.6-billion this year.
Nearly every industry stands to benefit from AI, too. One study says that AI will have a profound impact on health care, wealth management, mining, oil and gas, education, entertainment and retail, to name a few sectors.
At the moment, the firms that are benefiting from AI are using big data analytics and machine learning to solve specific industry or company problems. While it’s hard to invest directly in AI today, businesses like Google and NVIDIA Corporation, a Santa Clara, California-based company that makes the graphics cards that support AI computing processes, are “both good AI stories,” says Mr. Schmehl.
Google wants to use AI to help people save time, he says, which so far means using it to provide find better information through its search engine. However, the company does have Google.ai, a research division dedicated to helping advance AI usage. It recently used cancer-detecting algorithms at the Navel Medical Center in San Diego to test lymph nodes for breast cancer. The tests, say Google, were 99 per cent accurate.
While it may be awhile before clear winners present themselves, for now, investors can start avoiding the losers. “These are the old-line big tech companies that are full of technology that won’t work in the AI era,” says Mr. Schmehl.
Get in before it’s too late
The challenge for investors is to get into the AI boom before it’s too late. While there are exchange-traded funds that hold companies in the robotics and artificial intelligence spaces, it’s still too early to tell if the companies in these funds are the ones that will succeed in the future.
Mr. Schmehl, though, looks carefully at AI companies to determine which will do well. So, when that decisive investment opportunity does arrive, he will know it. “I’ve talked to the smartest people in this space,” he says.
For the time being, investors must be patient, and closely monitor how AI innovation unfolds. “It’s sort of one of those things where you have to release a technology into the wild and let people play with it,” he says.
Advertising feature produced by Globe Content Studio. The Globe’s editorial department was not involved.