Artificial intelligence (AI) is already everywhere and continues to evolve dramatically, owing to exponential advances in processing power and the availability of massive amounts of data. If we have indeed entered the Fourth Industrial Revolution, we can expect global wealth to increase and quality of life to improve for a good many people.
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We can also expect many creative investors to build empires on the back of AI. According to Jaspreet Singh, financial education enthusiast and self-described “random guy on YouTube,” AI is following a historically familiar course, albeit at a different pace.
“History doesn’t exactly repeat itself, but it does rhyme,” said Singh.
In a recent Minority Mindset video, Singh reminded his 2.25 million YouTube subscribers that those who ignored doomsayers predicting the failures of then new technologies like the internet, e-commerce and cloud computing made fortunes and cemented legacies.
Where AI Is Now and Where It’s Heading
Those fearing another Dot.com bubble have reason to be tentative with investing in AI, but many believe it will revolutionize the world the same way the internet did. Unrealistic rate of growth and market share erosion from competition may cost investors money, but those willing to look at the bigger picture are at risk of making a killing on the stock market.
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As Singh noted, not only is AI driving the growth and transformation of many parts of the economy, but it’s unfolding at a spectacular rate. Simple prompt programs and generative AI applications are still important in the here and now, but the immediate future of AI companies lies in machines that surpass humans in intelligence, or in technical terms, artificial general intelligence (AGI).
As a potential AI investor, you need to think differently.
“Many people think that the way that you can invest in AI is just by investing in the artificial intelligence companies. But it goes many layers deeper,” Singh said, using the metaphor of peeling an onion to discover hidden “opportunities that a lot of people don’t always hear about.”
Look at Less Obvious AI Beneficiaries
An obscene amount of money is being poured into both AI powerhouse stocks and startups. However, smart investors should look at businesses that support and benefit from their relationship with AI. As Robert Ruggirello, Brave Eagle Wealth Management’s chief investment officer, told Kiplinger, “You have to think a little bit out of the box.”
Share prices for many of the biggest AI companies are well beyond the average investor’s reach, but Singh recommends looking at firms developing quantum AI computing and data centers for dramatic future gains and lasting wealth growth.
The data center industry is already huge, but if we were to peel back the onion, we’d see investment opportunities in data center cooling and energy efficiency technologies for these facilities. According to McKinsey & Company analysis, around 40% of a data center’s energy consumption comes from cooling, and efficiency is always tied to productivity, which is the key to a company’s success.
For those who prefer to work and risk less and watch their money grow with the markets, Singh promotes passive investing. But if you want to succeed in investing in the rapidly maturing world of AI, being an active investor can create wealth-building opportunities away from the stocks making the news today.
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This article originally appeared on GOBankingRates.com: This Money Expert Says AI Is Changing Wealth — Here’s How
