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Robert Francis

The future of AI and why Aussie investors should keep watch

By Robert Francis
4 minute read

As artificial intelligence (AI) becomes the “future of everything”, savvy investors are heavily backing companies involved in this space.

Microsoft, Amazon, Facebook and Alphabet, which owns Google, are four of the biggest tech companies in the world and they are all using their positions to dominate AI research. 

Amazon is leading in advanced robotics and language processes; Alphabet started developing self-driving cars in 2019; Microsoft is building the biggest connected car platform in the world; and Facebook researchers are working on augmented reality and brain computer interfaces.

It’s no wonder then that AI is one of the fastest-growing markets in the world: global revenue was US$9.5 billion in 2018 and is expected to touch US$118.6 billion in 2025. 

For investors looking to be part of the future of technology, it’s important to keep a pulse on the news cycle and stay up to date with the latest AI developments.

Investors understand which companies are making huge strides in building the next big thing, and which sectors are beginning to engage with AI to fundamentally change their industries. 

AI is everywhere
Many people still believe AI is something out of the popular science fiction show Black Mirror.

But the fact is it’s advancing rapidly. Millions of consumers interact directly or indirectly with AI on a day-to-day basis via virtual assistants, facial-recognition technology, gaming platforms, chatbots, mapping applications and a host of other software.

Not only could AI make companies more efficient, it will also allow them to introduce new products throughout healthcare, automotive, financial services, retail, communications, manufacturing, energy, and transportation, according to PwC. 

The consultancy estimates that these product enhancements will make up 43 per cent of global economic growth in the next decade. 

AI and COVID-19
AI gets even more impressive when you analyse the effects it has had on the global pandemic. 

As the COVID19 outbreak continues to rampage around the world, companies and researchers have been using AI as a way to speed up treatments and vaccine discovery efforts. 

Research teams identified drugs that were developed to fight other diseases but could now be repurposed to take on the virus. For example, Eli Lilly’s arthritis drug Olumiant, which earlier this year UK researchers subjected to an AI analysis which found it had high potential as a treatment.

Other players such as American biotech Moderna have used AI as a predictive tool to look for the most likely vaccine candidate out of millions of possible options. 

The firm’s frontrunner status as a COVID19 vaccine candidate made it popular among investors, especially in July when it was the sixth most-invested stock on the eToro platform after its share price increased by 27 per cent. 

Interest in COVID19 vaccine stocks is expected to continue rising as investors try to identify the one that will come out with the first approved formula. 

AI has played a strong role in the non-medical side of controlling the pandemic as well. 

As a way to limit the amount of physical distancing in popular public places, Amazon Go Grocery uses AI technology to employ computer vision, sensor fusion and deep learning to remove the need for staffed checkouts.

Danish company UVD Robots has deployed autonomous robot cleaners to disinfect hospitals and medical facilities in China, and elder-care robots from ZoraBot have been designed to increase independence and reduce loneliness within the world’s growing elderly population during the global pandemic. 

But what about the future of AI? 
With AI pegged by some as the “fourth industrial revolution”, many countries have heavily invested in it as a source of their future economic growth, most particularly China.  

China has a goal of becoming the world leader in AI by 2030 and has already shown impressive developments, with expectations that AI will increase China’s annual growth rate by 1.6 per cent in terms of gross value added.

Chinese companies Baidu and NIO Inc. are building futuristic AI tech such as self-driving cars that rival those made by giants such as Tesla and Waymo, and EHang is testing drones that can autonomously carry passengers in the city of Guangzhou. 

Even technologies coming out of the US, such as the drone taxis proposed by Uber, are still cutting edge.  

As AI often takes a while to perfect, investors should take the opportunity to educate themselves about the future trends and adopt a long-term investment strategy in order to reap the rewards once a company’s technology booms. 

Robert Francis, Australian managing director of eToro