Investors to Look for AI-powered Investments by Big Tech Companies Turning into Gains

• Blockchain Council
• September 13, 2024

In the ever-evolving landscape of technology, 2024 promises to be a year where artificial intelligence (AI) takes center stage in the world of investing. The groundwork laid in 2023 has set the stage for what experts predict will be a remarkable year of AI-driven growth, revolutionizing various aspects of businesses and industries. As investors eagerly await the financial results of tech giants, including Apple, Microsoft, Meta, Amazon, Alphabet, Nvidia, and Tesla, it becomes evident that AI-powered investments are poised to turn into substantial gains. In this article, we delve into the transformative potential of AI, its impact on various sectors, and the strategies investors should consider in this AI-driven era.

The year 2023 witnessed AI’s emergence into the public consciousness, but 2024 is projected to be a year of unprecedented growth and proliferation of AI technologies. According to iShares, a staggering 70% of executives plan to increase their AI resourcing in the coming year, with cost reduction as a primary motivation. This surge in AI adoption is not limited to a single industry or scale of business; it has the potential to impact organizations ranging from Fortune 500 companies to regional and local enterprises.

As AI integration becomes more prevalent, the emergence of AI-focused roles is on the horizon. These roles encompass in-house AI ethicists, curators, policy makers, legal advisors, trainers, auditors, and interpreters, among others. Cliff Jurkiewicz, a technologist and VP of global strategy at HR tech firm Phenom, predicts that companies that create dedicated teams for these AI-related considerations will experience significant shifts in their financials and organizational structures. Companies failing to adapt may face lawsuits and regulatory hurdles, with countries like Germany, France, and Italy already taking steps to establish AI regulations.

While governments are just beginning to introduce AI regulations, technology is advancing rapidly, potentially outpacing legislation. This puts the onus on companies to gain the trust of customers and investors by demonstrating responsible AI usage. Jurkiewicz emphasizes that organizations need to self-regulate in the absence of federal legislation. Creating roles centered around AI ethics and curation can signal a commitment to responsible AI use, a factor that savvy investors are likely to consider.

Another AI innovation on the horizon is generative AI-based personal assistant bots, expected to become as commonplace as smartphones. These personal co-bots are anticipated to replace current automated assistants like Siri and Alexa. This evolution is expected to impact HR significantly, simplifying various hiring tasks for recruiters, hiring managers, employees, and candidates. The integration of personal co-bots is poised to streamline and improve the hiring process.

AI’s potential to transform software development is a topic of debate among experts. While some remain skeptical about AI’s capacity to assist in development, others believe it can accelerate traditionally slow processes. The key lies in the synergy between AI and human developers. Investors in tech companies are advised to monitor how AI and humans collaborate to enhance the software development process.

AI technology is also poised to make real-time language translation significantly more useful in the business world. Despite the current limitations of language translation software, AI’s natural language processing and machine learning tools are expected to rapidly improve accuracy. This advancement could enable seamless global collaboration across languages, benefiting professionals, researchers, and organizations worldwide.

The impact of AI on retail investors’ decision-making processes is profound. Jeff Shen, co-CIO and co-head of systematic active equity at BlackRock, envisions the future of asset management as an “AI-empowered investor” who combines big data and models with human insight. Rather than replacing humans entirely, successful investors are expected to harness AI’s power to analyze and sort through data while maintaining a human touch.

In 2023, the “Magnificent Seven” – Apple, Microsoft, Meta, Amazon, Alphabet, Nvidia, and Tesla – played a pivotal role in driving the S&P 500’s impressive 26% return, with AI excitement generating 62% of this gain. As these tech giants prepare to report their annual earnings, investors are keen to see if their multibillion-dollar AI investments translate into financial gains. Six of these companies are expected to drive the bulk of earnings growth in the S&P 500, underscoring the significance of AI investments.

As the AI revolution unfolds, investors are closely monitoring the race among tech giants to harness AI’s potential. Microsoft and Nvidia have taken the lead in AI integration, with Microsoft’s $10 billion investment in OpenAI setting the stage for significant growth. Their revenues from AI-related ventures, such as Copilot and Azure, are closely watched as indicators of successful AI adoption.

Tech behemoths like Meta and Alphabet have also been aggressively investing in AI startups and internal research, determined not to be left behind. Even Amazon, traditionally focused on Amazon Web Services (AWS), is making strides in AI by building its own large language models and data-center chips. This shift in focus reflects the tremendous potential AI holds for transforming customer experiences across various industries.

In this dynamic landscape, the world of technology and investing are on the brink of a new frontier, one where AI’s capabilities are harnessed to redefine how businesses operate, how decisions are made, and how investors navigate the ever-changing markets. As we look ahead to 2024, the fusion of human intelligence and artificial intelligence promises to shape a future filled with possibilities, challenges, and unprecedented opportunities for growth. It is a journey worth watching closely, for it will undoubtedly leave an indelible mark on the world of investments and beyond.