Entering the Age of Artificial Intelligence

Bill Gates recently released a letter[1] on the current era of artificial intelligence where he writes that AI like Chat-GPT represents a significant technological breakthrough on par with cell phones and the internet. More specifically, he highlights three areas already being transformed by AI, which include the workforce, healthcare, and education. He states all of these sectors have high need while lacking enough people to meet the demand. AI’s role in transforming these sectors relies on its biggest strength: the ability to process vast amounts of complex data to perform very specific tasks. 

First, Gates notes that AI can be integrated into existing digital work tools to act as a personal assistant for busy employees. Because of AI’s capacity for data management and human-like response, it can be used to write and manage emails, schedule meetings, organize priorities, and create presentations. Gates argues that AI can therefore be employed not to replace workers, but to make existing workers more efficient.

AI is also transforming education. Researchers at Arizona State University[2] are finding that AI tools have been incredibly successful at closing the learning loss gap from the pandemic and can be used for future educational disruptions. With a simple internet connection, students who were formally constrained by geography or finances can now use AI-enabled models to learn and prepare for tests, often in more individualized and engaging ways. In the classroom, Gates notes that AI is already being used to tailor lessons to individual learning styles, help plan curriculum, assess student comprehension, and track and implement motivation tactics. 

There are many administrative tasks in the healthcare sector such as filing insurance claims, completing paperwork, and taking doctor’s visit notes that can be handled by AI. Freeing up these tasks allows healthcare workers to provide the more nuanced task of caring for patients. AI’s ability to analyze patient data can also provide customized care plans based on individualized data. Or, AI can be used in personal IoT products like smartwatches to monitor health at home, save money, and put less strain on the healthcare system. AI is even being used to analyze medical data and design drugs more quickly and efficiently than traditional processes[3]

In each of the aforementioned sectors, AI can optimize the overworked employee, educator, or caregiver’s time and resources for better customer, student, and patient outcomes. The limitless nature of AI applications opens the door for untapped growth in the industries that make AI possible. Think: supercomputers, data processors, routers, and cybersecurity software behind the artificial intelligence interface.

Whether AI takes over administrative tasks in offices, hospitals, and schools or acts as a personal assistant, personal trainer, or one-on-one tutor, the demand for its underlying components will continue to grow as AI becomes ubiquitous across industries. The TrueShares AI, Technology, and Deep Learning ETF (LRNZ) focuses not on specific apps and startups, but instead offers a concentrated portfolio of actively-managed companies that educational modules, task managers, and health trackers use to provide AI-enabled solutions. With myriad ways of integrating AI into our lives, the possibilities for AI technology are limitless.

When analyzing AI related opportunities, we emphasize the ability to differentiate between “buzzwords” and business models. Buzzwords come fast and furiously. Successful business models are much harder to find. While the typical noise around artificial intelligence has become a cacophony with the awakening of ChatGPT et al, believers are quickly extrapolating the infinite possibilities of technology while skeptics, including some influential industry voices, are pumping the brakes and calling for regulation. Many investors reside somewhere in the middle, attempting to better understand the landscape, block out some of the noise, and identify avenues to capitalize on what seems to be an unstoppable evolution of AI and its applications.

From an investment perspective, we have found that a focus on the building blocks of AI uncovers several businesses that will immediately benefit from an AI escalation. Artificial intelligence applications are dependent upon several foundational capabilities – most notably algorithms, processing power and data. As several industries begin to emphasize AI in the context of increasing efficiency, lowering overhead and protecting margins, the applications perfected by these sophisticated users will be in high demand.