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How to Invest In Artificial Intelligence

Artificial Intelligence (AI) is a technology that looks to instill human intelligence in robots. A sub-branch of AI is Machine Learning (ML) that teaches machines to learn, adapt, and infer based on their own experiences rather than a series of pre-defined rules.

During the last few decades, the AI and ML fields have seen tremendous breakthroughs. This has given AI machine learning algorithms the ability to produce promising results in various areas, including business.

Today, organizations are increasingly relying on AI to help them make key business decisions, such as prioritizing healthcare in an emergency, improving recruitment practices, and determining a person’s loan, housing, and other vital services eligibility. As such, investments in artificial intelligence technologies have become critical for the survival and growth of most organizations today.

Benefits of Artificial Intelligence (AI) Investments for Businesses

The COVID-19 pandemic wreaked havoc on thousands of businesses throughout the world and showcased AI as a key differentiator between those who survived and those who perished. The benefits of this technology become increasingly evident as it is applied to various business operations.

According to the consultancy firm Capgemini’s study “The Enterprise Powered by AI,” 97 percent of the organizations surveyed indicated they had seen real benefits from AI implementation. As a result of the pandemic, 78 percent of corporate leaders stated they would continue to invest in AI in the same way they did before COVID-19, with one in five saying they intend to increase their spending.

Artificial Intelligence (AI) provides businesses with a broad competitive and long-term advantage in any of the sectors where it is used, causing many CEOs worldwide to be convinced of the need to invest in AI to help their businesses grow. The following are some ways investments in AI technology can aid the survival and growth of businesses today.

1. Efficiency and Productivity Gains

Two of the most frequently mentioned advantages of using AI in the workplace are increased efficiency and productivity. Tasks are completed at a rate and scale that humans cannot match. Simultaneously, by removing such activities from human workers’ responsibilities, AI enables them to focus on higher-value tasks that technology cannot manage.

This enables businesses to reduce the costs of completing monotonous, repeated tasks that can be automated while still utilizing the talent of their human resources.

2. Better Decision-Making

The modern world thrives on a massive amount of data. This is true even in the case of businesses that conduct thousands and thousands of transactions in a single day. AI-assisted machines can analyze this massive amount of data and be taught to uncover implicit patterns within it. This ability of robots is deemed to be unquestionably superior to that of humans in terms of both time and efficiency.

The outputs of the AI-assisted system can even be used to make inferences. AI findings are often novel, resulting in a visible difference in the decision-making process. For instance, AI may be used to anticipate which products are most likely to be purchased by a specific buyer from a specific business. This can help them make better decisions regarding marketing and product placement.

3. Improved Monitoring

Due to AI’s ability to handle large amounts of data in real-time, organizations can build fast monitoring capabilities that can notify them of issues, suggest action, and, in some situations, even initiate a response.

For instance, AI can use data collected by industrial equipment to identify issues in those pieces of machinery and forecast maintenance, preventing expensive and troublesome breakdowns as well as maintenance costs. The cost of maintenance will be kept down because maintenance work will be planned rather than being required.

The monitoring capabilities of AI can be used in other areas as well, such as an organization’s cybersecurity operations, where massive amounts of data must be processed and interpreted.

4. Reduced Human Error Impacting Business

When AI technologies are used in processes, organizations can expect a reduction in errors as well as a tighter adherence to defined standards.

When AI and machine learning are combined with Robotic process automation (RPA), a system that automates monotonous, rules-based operations, the result not only speeds up processes and minimizes errors, but it can also be instructed to develop and take on a broader range of activities.

For instance, using AI in financial reconciliation would produce error-free findings, whereas performing the same reconciliation through human workers, even in part, is prone to errors.

5. Better Management of Talent

Many elements of talent management are being improved by AI, from expediting the hiring process to eliminating bias in organizational communication. By successfully finding, screening, and selecting top-tier applicants, AI-enabled procedures can save companies money on hiring expenditures while simultaneously improving workforce productivity.

Companies are employing chatbots to deliver tailored experiences for job hopefuls and mentor staff as natural language processing capabilities improve. AI algorithms are also being used today to assess employee sentiment, find and retain high-performers, and establish fair pay.

6. Security Maintenance

Malpractices and financial fraud can be detected using AI systems that have been properly trained. This ensures a secure and hassle-free transaction, increasing client trust. This feature may be particularly appealing to companies that require fully automated systems or work with high-security data.

7. Improved Market Analysis

AI can be used to present information or advertisements that are only relevant to a limited number of products. Trained AI systems can successfully monitor price variations in real-time, allowing for commodity pricing revisions in response to demand.

This allows for the automation of existing product sales while also expanding the corporate market by exploring new, more appealing products.

Furthermore, they can reduce the likelihood of false positives (situations in which legitimate transactions are misclassified as frauds, transfers are declined, and accounts are suspended) and false negatives (scenarios in which legitimate frauds are missed).

It’s crucial to note that as businesses look for ways to employ AI to gain a competitive advantage, they’re also facing obstacles. AI bias, government regulation of AI, managing the data needed for machine learning initiatives, and skill shortages are all issues to be concerned about.

Furthermore, if the necessary skills and infrastructure for AI are not in place, financial rewards may be elusive. It is important to consider these factors before investing in AI technology for the above-mentioned business benefits.

Where to Invest in AI

Because of its rapid expansion, AI investment, or learning how to invest in the AI industry, is becoming increasingly popular. Some investors are getting more interested in stocks across multiple industries as AI becomes more integrated into different types of organizations and industries.

What makes AI investing so appealing is its potential for long-term profitability. It is a good idea to think about both qualitative and quantitative aspects before plunging into the world of AI investment. Even reputable, profitable firms can be a bad financial investment if share prices are too high for you.

Analyze performance and valuation indicators to better position yourself to buy AI stocks with high return potential. Some of the things to consider include:

  • The company’s financial health
  • Price-to-earnings ratio
  • The level of risk involved
  • The dividend potential—how much the stock is likely to pay in dividends
  • The stock chart for gauging price movements

To set yourself up for long-term success, your AI investment portfolio should be as varied and resilient as possible. The following are some of the areas where you can invest in AI.

ETFs

Many prominent U.S. public firms are either currently utilizing AI or actively trying to invest in the technology, so most retail investors have already been exposed to it. However, Exchange-traded funds (ETFs) provide an efficient and convenient alternative to invest in AI-specific stocks for individuals seeking a broader scope.

AI ETFs contain a portfolio of publicly traded firms active in all stages of AI, from research to application, similar to other specialized investing types such as genomics, cybersecurity, and blockchain technology. Some of the ETFs to consider include the following:

  • ROBO Global Robotics and Automation Index ETF (ROBO)
  • ARK Autonomous Technology & Robotics ETF (ARKQ)
  • Global X Robotics & Artificial Intelligence ETF (BOTZ)

Stocks

Investors wishing to invest in AI stocks have a variety of options. Today, many AI companies issue stocks for public buying. With so much growth in AI expected in the future, now is the best time for tech-savvy investors to get involved with AI stock investments.

How can investors who want to be among the first to invest in the next Google, Facebook, Apple, Microsoft, or Amazon obtain exposure to AI in a way that allows them to profit in the long run without taking on too much risk?

Investors should adopt a long-term view rather than betting on one or two businesses they believe would be big winners in AI.  It is also very important to have a diversified AI stock portfolio. Look for three things to unlock value when researching the market for AI winners:

  • Rich data sets that aid in the development of algorithms and apps that improve people’s lives.
  • Large data centers with big servers, as well as scalable processing capacity
  • Talent in AI engineering to avoid brainpower constraints

5 AI Companies Worth Investing In

Today, people and companies can profit directly from AI by investing in companies that sell the hardware, software, services, or knowledge of the technology. With this in mind, the following are some of the best AI companies to invest in today—both directly and through the purchase of stocks.

Nvidia

The AI boom has profited Nvidia, the world’s largest graphics chip company. Its graphics cards have become synonymous with data centres all around the world.

Nvidia’s data centre business model accounts for an ever-increasing portion of its total revenue. Nvidia’s graphics cards are utilized to help optimize a wide range of data centre uses, so it’s not all AI-related. However, artificial intelligence is one of the key drivers of the company’s expansion and growth.

DocuSign

Few investors would have guessed that acquiring signatures on a contract might be profitable. But DocuSign achieved just that, going from a $10 billion startup to a $50 billion giant with a stock price that has increased nearly sevenfold since its IPO in April 2018. (IPO).

And now, AI may be the catalyst for the company’s next phase of expansion. DocuSign’s acquisition of Seal Software, an AI firm, in 2020 implies the company can now support businesses and individuals not only in getting contracts signed but also in evaluating and monitoring contractual agreements.

Seal’s technology puts the “intelligent” in “artificial intelligence” by going beyond keyword searches and comparing crucial contract sections and terms side by side to uncover threats and opportunities. DocuSign is growing in practically every metric, which is a plus when it comes to investing in AI stocks.

IBM

IBM’s AI strategy aims to leverage the technology to enhance human intellect, increase efficiency, and reduce total costs.

For example, IBM’s AI technology is being utilised in the healthcare sector to create custom care plans, expedite the supply of new pharmaceuticals, and improve overall care quality. On the other hand, in the financial industry, IBM is utilising artificial intelligence to assist clients with financial regulatory compliance. So, investing in IBM’s AI development efforts can bring ROI from two different industries.

Amazon

Amazon may well be the organization that makes the most use of artificial intelligence. So, investing in its AI efforts may be a no-brainer. From AWS Sagemaker to Amazon Go grocery shops and Alexa, AI technology is the foundation of many of Amazon’s expansion efforts today. Investing in the cutting-edge AI technology of Amazon has the potential to yield massive returns.

Achievion

The last company to make the list is Achievion. Located in the heart of McLean, Virginia, Achievion Solutions delivers web and mobile solutions powered by AI to help companies of all sizes. The company was recently ranked by Clutch as Washington DC’s top AI company. Achievion delivers intelligent web and mobile solutions powered by AI to help companies get ahead of the competition. This alone is enough to encourage anyone to invest in the company.

Final Word

We hope this article serves as a good introduction to some of the principles and trends that illustrate why AI has so much promise in the investment sector. AI investing offers a variety of intriguing future possibilities, but investors should act with caution.

Before investing in AI, perform due diligence on the preferred AI investment to avoid losing money. When making investments in artificial intelligence (AI), proceed with caution will do your business and/or finances a world of good.

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