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Artificial Intelligence Reveals Itself

Readers who’ve immersed themselves in recent news stories about ChatGPT may guess the end of this article. Others might not.

By Tim Knight

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Artificial intelligence (AI) is a rapidly growing field, and several companies and industries stand to benefit from its growth. Some of the stocks that are likely to benefit the most from growth in AI include companies specializing in:

• AI research and development, such as NVIDIA (NVDA), Intel (INTC) and Advanced Micro Devices (AMD).

• Cloud-based AI services, such as Amazon Web Services (AWS), Microsoft Azure (MSFT) and Google Cloud (GOOGL).

• AI-enabled products and services, such as Salesforce (CRM), NVIDIA and Alphabet (GOOGL).

• Data and analytics services such as Splunk (SPLK).

• Development and manufacture of autonomous vehicles, such as Tesla (TSLA), Waymo (Alphabet) and NVIDIA.

• Development of AI-enabled software and services, such as Cognizant (CTSH), Infosys (INFY) and Tata Consultancy Services

As with any new industry, especially one promised to grow to the trillions, there are no guarantees.

False starts

AI is a rapidly developing field, and over the years, there have been several false promises and overhyped claims made about its capabilities. Here are a few examples:

In the 1950s and 1960s, AI researchers predicted that machines would be able to perform any intellectual task that a human could within a decade or two. These predictions proved to be overly optimistic, as many of the challenges of AI remain unsolved to this day.

In the 1980s and 1990s, there were many claims that AI-powered “expert systems” would revolutionize industries such as medicine and finance. While these systems did have some limited success, they ultimately failed to live up to the hype.

In the 2000s, there were predictions that AI-powered virtual personal assistants, such as Apple’s Siri, would be able to understand and respond to natural language commands. While these systems have improved over time, they still have significant limitations in their understanding and ability to respond to complex commands.

In the 2010s, there were predictions that AI-powered self-driving cars would be widely available within a few years. While self-driving cars are under development, they are not yet widely available, and the technology still has many challenges to overcome.

In recent years, there have been many claims about the ability of AI to achieve “human-like intelligence,” or “AGI.” While the field of AI is making rapid progress, experts agree that the development of human-like intelligence is still a long way off, if it’s even possible.

It’s important to note that these examples are not meant to discourage the development and advancements of AI, but rather to highlight the importance of being realistic about the capabilities and limitations of the technology.

Better decisions

Artificial intelligence can also be used in a variety of ways to help choose better investments in the stock market, such as with:

Predictive modeling: AI algorithms can be trained on historical stock market data to identify patterns and make predictions about future stock performance. This can help investors identify potential winners and losers in the market.

Portfolio optimization: AI algorithms can be used to analyze historical data on stock prices and returns, and to optimize the composition of a portfolio to maximize returns and minimize risk.

Investors can use artificial intelligence to help choose better investments in the stock market.

Sentiment analysis: AI can be used to analyze news articles, social media posts, and other sources of information to gauge public sentiment about a particular stock or market sector. This can help investors identify stocks that are gaining popularity or losing momentum. Algorithmic trading: AI-powered algorithms can be used to make trades automatically in response to market conditions and other signals. This can help investors take advantage of shortterm market movements and trends.

Firms at risk

As exciting as this all is, AI has the potential to disrupt many industries, and some companies may be more affected than others. The industries and companies that may be most harmed by the growth of AI include:

• Companies that perform manual and repetitive tasks, such as data entry and customer service, may see their jobs automated by AI-powered systems.

• Manufacturing companies that rely on manual labor for production may also be affected by the introduction of AI-powered robots.

• Transportation companies that rely on human drivers may also be impacted by the growth of autonomous vehicles powered by AI.

• Retail companies that rely on brick-andmortar stores may also be impacted by the growth of online retailers that use AI-powered personalization and recommendation systems.

• Banks, insurance companies and other financial services firms that rely on manual processes may also be impacted by the use of AI-powered systems for tasks such as fraud detection and financial analysis.

It’s worth noting that while some companies may be negatively impacted by AI, others may find new opportunities for growth and success by adopting the technology. It’s important for companies to be aware of these changes and adapt accordingly.

Opportunities via ETFs

For investors, there are exchange-traded funds (ETFs) that specialize in artificial intelligence. These ETFs invest in companies that are involved in the development and application of AI technology, such as companies that develop AI software, hardware and services. Here are a few examples of AI-focused ETFs:

• Global X Robotics & Artificial Intelligence ETF (BOTZ)

• Robo Global Robotics and Automation Index ETF (ROBO)

• First Trust Cloud Computing ETF (SKYY)

• Global X Autonomous & Electric Vehicles ETF (DRIV)

It’s important to keep in mind that these funds may not focus exclusively on AI and may also hold companies that are involved in other technology sectors, such as cloud computing, automation and electric vehicles.

AI has the potential to disrupt many industries.

The reveal

For the first time in this article, a human is typing these words. Except for some minor editing, everything above was composed by ChatGPT by posing a few simple questions:

“What are good examples of false promises from the past related to artificial intelligence?”

“What stocks will benefit the most from growth in artificial intelligence?”

“What kinds of companies will be harmed the most by artificial intelligence?”

“Are there ways artificial intelligence can be used to choose better investments in the stock market?”

Even the original illustrations in this piece were created almost instantly by a computer by making these two requests:

“Paint a stock chart in the style of Picasso,” and “create an illustration of the New York Stock Exchange with an artificial intelligence theme.”

The writing in this article isn’t going to win any literary awards, but it’s still well-constructed and has plenty of useful, actionable information. Considering that ChatGPT was introduced near the end of 2022, one can only imagine how powerful and useful this system will be in even one year’s time.

Tim Knight has used technical analysis to trade the equity and options markets for decades. He founded Prophet Financial Systems and created the website slopecharts.com, which offers free access to his charting platform. @slopeofhope

An AI News Story? Not Exactly.

The adjacent AI-written article qualifies as “artificial” because a machine produced it, but the word “intelligence” hardly applies.

The chatbot begins its piece with a classic example of how not to lead off a news story. It concocts a dull, passive sentence typical of a sleepy small-town weekly newspaper but unfit for a sophisticated urban daily.

More specifically, a story in a weekly might begin this way: “The city council met Wednesday in regular session to consider building a new town hall.” A daily might present it this way: “Rioters hurling fiery Molotov cocktails broke through police lines again last night as protests against the construction of an expensive new town hall entered their third day.”

With that rather striking comparison in mind, let’s look at how an editor might sharpen the first sentence of this AI piece for investors.

AI: Artificial intelligence (AI) is a rapidly growing field, and there are a number of different companies and industries that stand to benefit from its growth.

Human: Artificial intelligence is poised to change nearly every aspect of global commerce: Companies with savvy leadership will prosper, while the clueless will fail.

Now that we’ve strung together nearly 200 words just to complain about the story’s first sentence, let’s move on.

If variety is the spice of life, nobody told ChatGPT. The chatbot chooses the words “there were” to construct sentences in four consecutive paragraphs. That makes me want to take a nap.

Besides, it’s not just the repetition that leaves me feeling somnambulant. Something else seems wrong, too. Human writing coaches regard sentences with the words “there are” as passive. Instead, they recommend active sentences that derive power from strong verbs.

Passive: There were predictions that AI-powered self-driving cars would be widely available within a few years.

Active: Futurists predicted AI-powered self-driving cars would be widely available within a few years.

See the difference? If not, you’ll still feel the difference as you read.

We could go on, but we’re leery of judging AI-produced writing too harshly. It may strike us as lame now, but it’s expected to improve so much so quickly that our criticism may become dated almost overnight—maybe even quaint. We’ll soon see.

In the meantime, we’ll express our appreciation to Tim Knight for producing this AI-written column and sharing the questions he used to do it. We already liked his articles, and now we like them even more now that we’ve experienced machine writing.

As for the chatbot? Let’s give it an A for effort but a C- for writing skills. Its article seems lackluster—competent but by no means professional.

— Ed McKinley

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