Where to invest in Artificial Intelligence in 2024

15 April 2024

The rapid growth of generative Artificial Intelligence was arguably one of the biggest drivers of innovation in 2023, but what opportunities are there for investors today?

Why are investors interested in AI?

While early forms of Artificial Intelligence (AI) led to increased business efficiencies through Machine Learning and powerful data analytics, generative Artificial Intelligence (GenAI) could disrupt entire industries and ways of working. In fact, AI is already being integrated into day-to-day business practices at some of the world’s largest companies.

The rapid adoption of GenAI is similar to the introduction of the PC, internet and smartphone, which led to significant behavioural shifts and the creation of entirely new markets like eCommerce and online advertising. The promise of AI is one of maximum productivity and increased operational efficiencies, as greater automation enables companies to increase output exponentially.

Please be aware that as with all investments, your capital is at risk and you may not receive back the same amount that you invest. This article is designed to throw an everyday lens on some of the issues being discussed and debated by investors across the world; it is not research, so please do not interpret it as a recommendation for your personal investments.

Does AI still matter in 2024?

The short answer is yes. Even if you did not use ChatGPT or similar GenAI tools in 2023, chances are high that you at least heard about it, and developments in this space continue to make headlines with the promise of increased productivity. We believe the ongoing development of GenAI will influence company performance well into the future and could even cause new industry leaders to emerge.

While the current GenAI models facilitate “context retention”, which has manifested in the form of AI models completing new tasks via the likes of AI assistant and Copilot-style applications, this is just the beginning – as before long, we expect to see wholesale changes in the way work is defined and executed.

Companies we are investing in

Our Thematic approach connects investors directly to the trends, industries and companies shaping the future, and we have been closely monitoring the theme of AI for many years. Below are a few examples of companies we are investing in as they look to recognise the potential of adopting AI to gain a competitive advantage:

Microsoft was an early investor in Open AI, the minds behind ChatGPT, and has incorporated the software into its Bing search engine. Microsoft are also utilising AI to enhance their existing products, an example of this being Copilot, a productivity enhancing tool designed to function alongside the Microsoft office programmes that are so embedded in our everyday life.

Nvidia is a US listed global leader in industries such as gaming, professional visualisation, and automotive markets. Its popularity with investors lies in the fact that the company’s products have thus far proved integral to the development of AI. AI models require thousands of high-powered GPUs to run effectively and Nvidia currently dominates this space, holding over 80% of the market share. Furthermore, Nvidia is also taking advantage of the opportunities around AI services, offering pre-built models and consultations to a variety of industries.

McDonalds may not stick out as an obvious beneficiary of AI at first, but we have identified some key areas where its implementation could drive huge increases of efficiency. In recent years McDonald’s has put more emphasis on its digital operations ranging from its in-store ordering boards through to the development of its mobile app. We believe that generative AI can provide a further chapter in McDonald’s digitisation story by driving sales and cutting labour costs. AI could be implemented into McDonald’s drive throughs and its mobile application to create a more tailored experience, recommending different menu items depending on factors such as the weather and time of day.

Navigating opportunities in a rapidly evolving market

It is important for investors to remain aware of developments in AI to ensure they can capitalise on opportunities to see greater returns, especially as it is too early to say who the winners will be in this space. Whether your preferred investing strategy is buying company shares, targeting specific industries or contributing to funds to own a bit of everything, we can help.

With fast-moving situations, like that of AI, seeking financial advice can help you take the most effective course of action. If you currently manage your own investments, you may wish to consider delegating management to an expert from Killik & Co, who will closely monitor the markets and recommend further opportunities to positively position your portfolio.