BT issue 16 VF - Flipbook - Page 30
ISSUE 16
§
INVESTING IN ARTIFICIAL
INTELLIGENCE
Written by Karl Williamson, CFA Investment Director, Quilter Cheviot
A
rtificial Intelligence (AI) has been one of
the hottest investment themes of 2023, as a
growing number of money managers have
become increasingly of the view that this potentially
transformative technology is the next big thing. This
collective belief has propelled a number of stocks
sharply higher, most notably Nvidia, with the Silicon
Valley based chipmaker becoming just the ninth
publicly listed company to hit a US$1tn valuation. The
stock gained 180% since the turn of the year to hit this
landmark, surging in price from just above 300 to more
than 400 in a matter of days following its latest earnings
update in late May.
Unsurprisingly, the scale of these gains in such short
order has divided opinion and created polarising
views on Nvidia’s prospects. More broadly speaking
there has been a huge amount of interest in AI of late
as the realisation of the potential upside to work, and
even whole economies, is becoming more widely
recognised. That said, while most observers can agree
on the potential benefits that generative AI offers, there
are still a number of voices calling recent market moves
clear signs of an investment mania, or bubble.
AI is not a new phenomenon with a fair number of
proponents for the technology dating back several
years. What appears to have changed more recently
though, and led to the widespread hype, is that practical
uses for everyday people have become abundantly clear.
ChatGPT is the fastest growing consumer application to
reach 100m users, taking just three months to hit the
milestone. To place this in context, TikTok reached this
landmark after nine months, while it took Instagram
two and a half years.
SEARCH VOLUME FOR AI HAS ROCKETED IN RECENT MONTHS
3 0
30
