Artificial intelligence (AI) technologies have made their way to the mainstream, and major tech companies are competing to offer better solutions for their customers and investors.
AI itself is the simulation of intelligence in manmade software, and the field involves the study, development and application of machines able to learn and make decisions in a similar way as humans.
While the buzz around AI has been promising, some analysts have articulated worries about a bubble forming around the biggest tech stocks, prompting some investors to wonder whether now is a good time to invest in AI.
There’s a lot to understand about this fascinating subject, and the Investing News Network is here to help answer all your questions about the AI industry, including whether now is the right time to invest, how to get exposure to AI and whether AI stocks are a bubble. Read on to learn more about this developing market.
The term “artificial intelligence” was coined by John McCarthy in 1956 at the Dartmouth Summer Research Project on AI. The project’s goal was to brainstorm about AI’s potential and how to achieve it. The event brought together brilliant mathematicians and scientists from around the world and is considered the catalyst for establishing AI as a field of study.
The excitement and interest from users — and investors — have prompted tech companies eager to capitalize on the groundbreaking technology to pour billions of dollars into AI research and development (R&D).
Microsoft’s product releases had become somewhat stagnant in the years leading up to their involvement with ChatGPT. While the company continued to iterate on existing products and services like Windows and Office, there was a lack of truly groundbreaking or innovative releases that captured widespread attention and excitement the way its AI product offerings have.
To understand the AI landscape, it’s helpful to break down the key players into three distinct segments: the software designers crafting the AI models and providing essential infrastructure, the chip designers creating the specialized hardware and the chip manufacturers bringing these designs to life.
The relationship between Nvidia and TSMC is one of critical interdependence and mutual benefit, similar to the partnership between Microsoft and OpenAI, as both are key players in the semiconductor industry.
The transformative potential of AI is undeniable; it’s no longer a question of “if” but “how” AI will shape our future. This sentiment is mirrored in the market, with clear examples of AI’s impact on stock valuations.
“AI has the potential to create new industries, tasks, and business opportunities, driving long-term economic growth and productivity improvements beyond current projections,” Mangin wrote. “Just as the internet gave rise to entirely new sectors like e-commerce and social media, AI can lead to the development of new fields and professions. This will not only create jobs but also spur innovation and economic diversification.”
“Therefore you end up with something that is very expensive and has yet to prove anywhere really, outside of some narrow applications, that it’s paying for this,” he said.
The contrasting views among analysts and experts create a complex landscape for investors. While AI’s potential is undeniable, navigating its investment complexities requires careful consideration.
Chipmakers such as TSMC, Broadcom and Qualcomm are options for investors looking to invest in the hardware components needed for AI.
This is an updated version of an article first published by the Investing News Network in 2023.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
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