Artificial Intelligence (AI) has been around for a long time, dating back even beyond Alan Turing’s seminal work in the 1940s.
The idea that machines can conduct cognitive functions and be capable of learning and problem-solving has gone through several periods of hype and disappointment.
As a number of concrete applications and investment possibilities have emerged in the AI space, the latest AI winter – as periods of waning interest and development in AI are known – is on its way out.
Reasons for the latest developments are twofold. First, continual advances in computing power mean that faster processors allow applications to run analysis on large data sets and produce sophisticated outputs. The end of this latest AI winter is also being backed by significant funding, not just from traditional technology firms, but also start-ups and even governments.
The implications for investment markets and the wider society are huge. AI is a significant step ahead of simple robotics, and jobs previously thought to be safe from computers are now firmly within their sights.
As a fund manager it’s always a little unnerving to hear that complex algorithms can now analyse company statements, share price movements, adjust financial models and execute profitable trades based on an intelligent interpretation of the past.
All this comes at a speed much faster than a human could manage. And if I thought by taking a break from analysing companies to write this piece might lead to a career in writing, it should be noted that a number of organisations are already using AI to turn data into coherent – if dry – pieces of prose, and it’s estimated that the majority of articles could be written by computers within 15 years.
Healthcare is another area benefiting from the latest advancements in AI. IBM’s flagship supercomputer Watson can read 200m pages in three seconds, meaning best-in-class healthcare can be shared globally, not locked away in the minds of individual specialists.
From curing disease to a remedy for shopaholics, Amazon has been using AI in its customer recommendation system for years. However, it is doing much more than this, using AI in areas including machine learning and natural language processing, which have fed into the processes behind its popular home assistant Echo, which recently launched in the UK.
While these advances can be daunting for those working in the affected industries, for society as a whole AI could be the answer to one of the western world’s long-standing economic bugbears: the challenge of boosting productivity.
With history as a guide, previous disruptions may cause-short term problems, but market economies find a way of rebalancing labour to another sector over time. Today we wouldn’t blink twice at withdrawing cash from an ATM machine, but when these were first launched there were fears that thousands of bank cashiers would never participate in the labour force again.