Experts from the international Forex broker OctaFX have embarked on a quest to dive into a fundamental question: how is AI’s already emerging, tremendous and disruptive potential impacting investment opportunities?
At Google’s recent annual presentation, an announcement was made, which might signal a grand stepping stone for what some consider the next major chapter of the ‘Fourth Industrial Revolution’.
Google has initiated a comprehensive, full-scale integration of artificial intelligence into all of its products and services. Artificial intelligence (AI) is revolutionising industries by offering simplified, faster and more cost-effective solutions. The use of computers to mimic human intelligence provides a competitive advantage that not only ordinary people, but many public companies want to take advantage of.
Combine that with the fact that Microsoft has begun a strategic partnership with the digital advertiser Perion Network for its AI-powered search engine Bing. Moreover, the tech giant recently integrated ChatGPT into its search engine, investing billions of dollars in the process. You’ll realise that AI is the future—and it’s here.
ChatGPT, developed by OpenAI and released in November 2022, is the newest and most advanced system transforming the work and sharing technologies of the future.
One of the latest revolutionaries in technology and communications, ChatGPT may reach into exams, medical licensing, or university programs, so entrepreneurs, businesses and industries are experimenting with this new technology. With its ability to streamline communication and interact in conversations, ChatGPT performs a range of actions from writing to coding and provides dialogue formats that allow complex topics to be explained, suggest additional questions, acknowledge mistakes and reject inappropriate requests.
According to Elon Musk, ‘ChatGPT is pretty darn good. We’re not far from dangerously strong AI.’ And while ChatGPT is not foolproof, it is already causing a stir in the stock market as investors are eager to see how viable this investment will be.
For every IT multi-billionaire painting a ‘doom and gloom’ picture, there are a dozen—if not more—being highly enthusiastic about the whole idea of artificial intelligence taking over the world economy and everyday life.
Maybe not as outspoken as Elon Musk in his tweet, but enthusiastic nonetheless: Microsoft is entering into a strategic partnership with the owner of ChatGPT (OpenAI) and integrating them into its search engine, Bing. Although Microsoft’s Bing is far behind Google and occupies only 3 percent of the global search market, the integration of AI could have a significant impact on the balance of power in this segment.
In fact, most inhabitants of the IT industry and its influencers labour in great anticipation to AI’s great entrance onto the world stage.
In addition to the software and coding companies, the hardware segment is growing too, since AI in the service of IT corporations needs high-performance servers and storage solutions. For example, the shares of Super Micro Computer, Inc. [NASDAQ:SMCI] have risen more than 200% in the last year.
We see that these solutions are appreciated by technology companies, and investors are capitalising on the growth of their stock. By the way, AI is also actively used by investment banks:
JPMorgan, for example, uses artificial intelligence trading software , which utilises machine learning applied to billions of historical trades to outperform human traders. Reinforcement learning techniques can even optimise the behaviour of other market participants responding to automated trading strategies. And, as recent research shows, 68% of investment houses use AI decision support tools in asset management organisations.
Overall, it’s clear that artificial intelligence is playing an important role in this area.
The OctaFX financial expert Kar Yong Ang reiterated this principle: ‘AI applications are on the rise that identify complex trading patterns on a grand scale and across multiple markets—in real time. What this means is, a synergy between rapid big data processing solutions and advanced machine learning technology is utilised to tackle the following: manual error risk reduction, smart entry automation, market impact reductions, and position exits.’
There are advanced start-ups that even began utilising AI to bring about quantitative trading strategies and price forecasts for the crypto domain.
Other fintech players concentrate on integrating AI into novel search platforms that gather intelligence from extensive libraries of private and public sources, including SEC data, industry-relevant insider publications, or transcripts of earnings calls. These industry-specific search engines then can be personalised to suit the specific portfolio needs and the overall profile of the investing or trading client.
So designing and implementing a trading strategy manually and with organic (human) cognitive skills was yesterday—nowadays, any private investor can save time and resources simply by sending a query to the AI to search for information, which in three to four iterations will find the stocks with the greatest upside potential, tailored to each user.
The studies on this topic are literally overflowing with references and analytical forecasts on AI’s significant growth potential. A market of its own that is already in the process of stretching like a tent over most other markets. This development has begun to attract software companies across the board, including video game developers, blockchain projects, Business Intelligence (BI) providers, online dating, ad targeting, and the different AI stock trading bots alluded to above—to just name a few. A general rule of thumb: the stocks of any serious hardware and software production companies that pledged to deeply implement AI into their products are promising candidates for personal investment.
The potential returns on mid- and long-term investments in this emerging tech phenomenon are huge, mostly still untapped, and the niche is not yet as occupied as it probably should be.
Google’s latest decision to an all-encompassing deployment of AI into its services has been the trigger for democratisation: once, only huge investment funds were privileged to apply AI to analyse and interpret data for financial gain—soon, anyone with a smart device will be able to do just that.
Regardless of the personal, social, and political impact of an AI-powered world economy and civilisation—for better or for worse—the fact remains: individuals who decide upon investing in AI technology today, will soon discover that they have become part of something historically unique—with the corresponding gains and returns.
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