Sep. 27, 2022 01:25PM PSTArtificial Intelligence Investing
Learn how to invest in the growing artificial intelligence market, which is projected to reach more than US$1.8 trillion in value by 2030.
Grand View Research estimates that there will be massive growth in AI over the next several years, with revenues reaching more than US$1.8 trillion in 2030, up from US$93.53 billion in 2021.
With that in mind, here the Investing News Network provides an overview of how to invest in artificial intelligence for those interested in stepping into this complex and ever-growing sector.
What is artificial intelligence?
NVIDIA credits open-source frameworks for creating a revolution that has been backed by the development of graphics processing units with faster and more powerful chips that can support machine and deep learning.
While “Narrow AI” is currently in play, the natural progression is towards “General AI,” which in concept is a machine that has human senses and does things just like humans do.
AI and machine learning often get intertwined, but at the Viva Technology event several years ago, Eric Schmidt, chairman of Alphabet (NASDAQ:GOOG), explained the difference between these two aspects of the fourth industrial revolution.
Putting it into simple terms, Schmidt said that machine learning is how a system looks at complex sets of data and learns from this information, while AI is how the data is expressed. “We think of it as a human-like experience and intelligence, but what's really happened is that machine has learned from patterns,” he noted.
He pointed to Google’s Google Photos and Google Translate products as examples of AI and machine learning that are in play today, but said many believe the next generation of algorithms will be much more powerful.
What is the outlook for artificial intelligence?
According to Grand View Research, ongoing research from tech giants such as Alphabet, Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) is driving the adoption of AI in industries such as automotive, healthcare, retail, finance and manufacturing.
“For instance, from self-driving vehicles to crucial life-saving medical gear, AI is being infused virtually into every apparatus and program,” the reports authors state.
The segment with the biggest market share is software solutions, accounting for 38 percent of the global AI revenue in 2021. By 2030, the healthcare sector is anticipated to have the leading share.
The report suggests that North America will largely dominate the space due to high government investment in AI, leading players and a strong technical base. In terms of the fastest-growing market, Grand View Research believes the Asia Pacific region is at the top of the list thanks to improvements in information storage capacity, high computing power and parallel processing. The report indicates that those three areas are part of why AI has been implemented so rapidly in industries such as automotive and healthcare.
Other market projections come from Research and Markets, which suggests the AI market will grow at a compound annual growth rate of 32.8 percent between 2020 and 2027 to reach US$341.4 billion.
Fueling that growth will be AI solutions such as virtual assistants, marketing, search advertising, identity access management, intruder detection and cybersecurity for the future.
How to invest in artificial intelligence?
With such growth potential in the AI market in the coming years, investors may very well want to dive into the sector. There are a number of ways to do so, including exchange-traded funds (ETFs) and stocks.
Artificial intelligence exchange-traded funds:
For those who would rather invest broadly in AI rather than in a specific company, ETFs are a popular option. Here’s a brief overview of three AI ETFs for investor consideration:
- Global X Robotics & Artificial Intelligence Thematic (NASDAQ:BOTZ): The fund began on September 12, 2016, and its top holdings include NVIDIA, Intuitive Surgical (NASDAQ:ISRG), Keyence (OTC Pink:KYCCF,TSE:6861) and ABB (OTC Pink:ABLZF,SWX:ABBN).
- ARK Autonomous Technology & Robotics ETF (NYSEAMERICAN:ARKQ): This fund was started on September 30, 2014, and its top holdings are Tesla (NASDAQ:TSLA), Trimble (NASDAQ:TRMB) and Kratos Defense & Security Solutions (NASDAQ:KTOS).
- Robo Global Robotics and Automation Index (NASDAQ:ROBO): The Robo Global Robotics and Automation Index began on October 22, 2013, and its top holdings include iRobot (NASDAQ:IRBT), Intuitive Surgical and Rockwell Automation (NYSE:ROK).
Artificial intelligence stocks:
Investors looking to put money into AI stocks also have quite a few options available to them.
To help potential AI investors get an idea of the various sectors available to them under the AI umbrella, the Investing News Network has put together a number of lists:
These lists of AI companies of course provide only a small glimpse at the broader sector, but for those just learning about the AI investment opportunity they are a good place to start.
With so much growth in AI anticipated over the coming years, now more than ever may be the time to invest in this space.
This is an updated version of an article originally published by the Investing News Network in 2018.
Don’t forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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