Bow to Your Robot Overlords
Last week, we talked about the growing trend of artificial intelligence — in fact, you heard directly from a cutting-edge AI loaded on a workstation right here in the trading lab!
Today, I want to bust a couple more myths about the coming wave of AI profits.
And I’ll share a way you can play it right now.
As I said last week, one of the biggest misconceptions today is that we need fully intelligent, self-aware AI systems before investors can make money with them. That’s simply not true.
Some of the biggest value unlocks in the years ahead will come from leveraging AI to do very specific, narrowly defined tasks…
Stocking shelves. Driving your car. Flipping the burgers at McDonald’s…
But another huge misconception is that AI is only targeting low-skilled labor.
Fancy-pants white-collar work is being replaced by AI too.
This one ought to be popular: Right now, several startups are working on AI that can replace lawyers.
A company called Luminance is using a machine-learning engine to pull important information from contacts and legal documents in seconds. This AI can flag unusual or unwanted language in a merger deal, for instance, without paying a team of $1,000-an-hour Wall Street lawyers to read through each page with a highlighter in hand.
And that’s just the beginning.
It turns out that it’s a lot easier to teach a machine to automate parts of accounting or routine contract law than to drive a big rig.
A Stanford study published last year noted that workers who have a bachelor’s degree would be exposed to job encroachment from AI over five times as much as those with only a high school degree!
That doesn’t mean that white-collar workers are going away — at least not immediately. Pricey contract lawyers still need to review what the AI spits out (for now). But it does mean that the nature of their work may change dramatically.
And the number of hours needed to complete office tasks is likely to plunge.
We’re heading toward a true revolution in the way work is done, from the factory floor to the trading floor.
Back in the Industrial Revolution, there was a huge value unlock for the folks who owned the factors of production. That’s changed in the information economy — human capital has become a much more important element of a business’s growth potential than the buildings and machines they own.
(It’s how Facebook has created $730 billion in value in the last 16 years out of thin air!)
But as we start replacing human capital with AI, the next big value unlock is going to go to the folks who own that technology.
That’s why it’s so important to get some AI exposure in your portfolio today.
An easy way to do that right now is with the Global X Robotics & Artificial Intelligence ETF (NASDAQ: BOTZ).
This exchange-traded fund holds 31 individual stocks with exposure to AI and industrial robotic automation.
Making sure you own stocks that own AI tech is the first step to making sure that you’re not left behind as AI sees increasing commercialization in the next few years…
Meanwhile, stay tuned — we’ll have plenty more to say about the biggest AI opportunities in the weeks ahead.
Jonas Elmerraji, CMT