Want to Know How to Profit From AI? Here’s What ChatGPT Advises
How do you profit from artificial intelligence? For the answer, Gordon Pape goes directly to the source and asks ChatGPT for its take. Photo: ipopba/Getty Images
Some 5,000 scientists, academics, industrialists, and others have signed a petition calling for a six-month moratorium on the development of artificial intelligence (AI). Another 50,000 people are reportedly lined up to add their names.
The idea for the pause is to allow the world to formulate guidelines and rules for how AI is to be expanded and controlled in the years ahead. The proponents of the pause feel that without tight monitoring, we risk being overtaken and crushed by our own creation. A digital Frankenstein’s Monster! Our only hope is to control it before it controls us.
It’s a laudable idea. It’s also totally impractical. Is China going to halt its AI programs? Is India? Is Israel?
Do we expect Microsoft to stand pat while Google forges ahead?
And even if we could somehow persuade all these entities to sign on, how exactly would the moratorium work and what would be the end result? A United Nations resolution? The UN hasn’t unanimously agreed on anything since it was created at the end of World War II.
Yes, we do need some controls on AI. But stopping development for six months will do nothing except give cheaters an edge. What will work? No one has found a realistic answer yet. Perhaps we should go back to the three laws of robotics that science fiction author Issac Asimov created in a 1942 short story. They are:
1. A robot may not injure a human being or, through inaction, allow a human being to come to harm.
2. A robot must obey orders given it by human beings except where such orders would conflict with the First Law.
3. A robot must protect its own existence as long as such protection does not conflict with the First or Second Law.
The problem is that these laws don’t cover many of today’s concerns. There is nothing to prevent AI from stealing human jobs. AI can be used to cheat your way through school without violating Asimov. It could be argued that AI is free to develop its own intelligence far beyond human capabilities. We’re in uncharted territory.
While great minds try to solve this conundrum, the rest of us are left to consider how we can profit from this dizzying new branch of science. What better way to find out than to go right to the source. I asked the question to ChatGPT. Here’s an edited version of its reply.
“Investors can profit from the development of AI by investing in companies that are at the forefront of the AI industry or are integrating AI into their products and services. Here are some examples:
1. “Technology companies: Technology companies that are involved in the development of AI can be excellent investment opportunities. Some examples of companies that are investing heavily in AI include Google, Microsoft, Amazon, IBM, and NVIDIA.
2. “Robotics companies: Robotics companies that are integrating AI into their robots can also be good investment opportunities. Companies such as ABB, Fanuc, and Kuka are examples.
3. “Healthcare companies: Healthcare companies that are using AI to improve patient outcomes, diagnose diseases, or streamline administrative tasks can be excellent investment opportunities. They include IBM Watson Health, Medtronic, and Pfizer.
4. “ETFs and mutual funds: Investors can also consider investing in exchange-traded funds (ETFs) or mutual funds that focus on AI. Some examples include the Global X Robotics & Artificial Intelligence ETF (NDQ: BOTZ) and the ROBO Global Robotics and Automation Index ETF (NYSE: ROBO).
5. “Startups: Early-stage startups that are focused on developing AI solutions can also be excellent investment opportunities, but they come with higher risks. Investors can look for opportunities through venture capital firms or online platforms that specialize in connecting investors with startups.
6. “Overall, investors should conduct thorough research and due diligence before investing in any AI-related companies or funds. The AI industry is still in its early stages and investing in AI-related companies can be highly speculative and subject to high volatility.”
That’s a reasonable and responsible look at the broad AI investment landscape, complete with warnings about risk and speculation. It was generated in less than a minute after the question was submitted. Impressive. Scary.
What about the quality of the advice? Google (Alphabet), Microsoft, Amazon, IBM, and Nvidia are all on the Internet Wealth Builder recommended list and all have been profitable. Alphabet announced last week that it plans to incorporate Chat AI into its Google search engine this year. Microsoft is already using ChatGPT in its Bing search engine. So much for a moratorium!
ABB, Pfizer, and Medtronic are also on our recommended list, although the latter is down from its recommended price. IBM Watson Health is not publicly traded.
Fanuc is a Japanese-based company that is the largest maker of industrial robots in the world. Besides Japan, it has operations in the U.S. and Europe. The shares trade on the U.S. over-the-counter market under the symbols FANUF and FANUY.
Kuka manufactures industrial robots in Germany but is 96% owned by the Chinese company Midea Group. It’s listed on the OTC market as KUKAF but there appears to be no active trading.
Neither BOTZ nor ROBO are on our recommended list. Both ETFs have similar charts. They reached their all-time highs in 2021, then went into a deep slide. They’ve recovered this year, with BOTZ up about 19% year-to-date while ROBO has gained about 14%.
Both these ETFs look interesting in the current environment. Their prices aren’t cheap, but ROBO has the lower p/e ratio at 27.4. BOTZ has a slightly better average annual return since inception. Either would be a good choice if you want an ETF in the AI sector, but my preference would be to buy shares in Microsoft, Alphabet, and/or Nvidia.
Gordon Pape is Editor and Publisher of the Internet Wealth Builder and Income Investor newsletters. For more information and details on how to subscribe, go to www.buildingwealth.ca.