The Revolution in Investing Powered by Generative AI
With the advancements in the growing sphere of AI, there are new avenues to expand your investing options. These are some ways to make generative AI work for you.
The recently-released sci-fi thriller The Creator tackles the very question in all our minds – where do we draw the line between humans and AI? The film is fictional but feels real because it hits home. It makes us think about how we can best harness the power of AI to help us in every aspect of our lives. The plot tackles the delicate issue of striking a balance between the two worlds (ok, we’ll stop here to avoid spoilers).
While the film takes place in the future, we can already see how big AI’s role is in how we work and play. Routine and mundane task are completed with just a single prompt, and if you’re in the creative sector, you know how AI can help you brainstorm ideas when you’re facing writer’s block. Finding your YouTube recommendations too accurate? That’s AI reading your mind. Just kidding! Or maybe not?
ChatGPT has generated a lot of buzz, and justifiably so. There’s just so much potential. Within just five days of its launch, it managed to attract a million users. Compare that to other platforms that generated a lot of hype.
Source: Company announcements via Business Insider/Linkedin
The AI world is moving fast. Tech industry giants Nvidia and Foxconn have joined forces to build “AI factories”, an innovation in data centres that uses Nvidia chips to power a wide range of applications like autonomous vehicles, robotics platforms, and large language models.
Generative AI is, without a doubt, a breakthrough. It has proven its use in the business world to help drive profitability, driven by its ability to generate new, realistic content and models from training data. Generative AI algorithms are built on top of foundation models that are trained on vast quantities of unlabeled data, using self-supervised techniques to uncover patterns for various tasks. It has reached a maturity level where users can enter complex inputs to get an equally complex output which is usable to improve effectiveness and creativity.
Source: T. Rowe Price, October 2023
A notable example of generative AI’s power is the year-to-date performance of the US market. Most of this strength comes from seven stocks that leverage it. These companies include Apple, Microsoft, Alphabet, Tesla, Amazon, Facebook (Meta), and Nvidia.
Exploring the AI landscape and building blocks
To focus on generative AI, let's explore the key sectors that make up its building blocks. The industry is likely in the early stages of a growth curve, where gamechangers drive the momentum.
It has impacted many different sectors and ways of business. Below are some companies offering products based on generative AI.
BASE10 Trend Map: Generative AI
Companies are group based on medium produced and segmented by us within each medium. Companies that offered products across segments are grouped in the segment of the core product offering.
Source: Wellsaid Labs
Although most generative AI companies are based in the West, it’s essential not to overlook investment opportunities in Asia. Let’s create an overview of the AI landscape. While this diagram is not exhaustive, it provides a useful guide for identifying direct and indirect players in the Asian markets.
Source: RHBAM as of July 2023
Potential generative AI solutions for you
We shouldn’t just discuss these matters without devising a strategy to help you harness the power of generative AI. Below are some options that we have created that you can include in your diversified portfolio.
Source: Novagni, 2023
Year-to-date basis, both TA Global Technology and RHB Global Artificial Intelligence fund has shown double-digit returns. With market consolidation in Q4 2023, an opportunity arises for investors to accumulate exposure to technology-related assets for long-term investment prospects. Stay updated with the latest investment insights and determine the most suitable products and portfolio allocation. Reach out to an RHB Relationship Manager to explore how we can help you participating in the Generative AI mega trend.
Source: Refinitiv, November 2023
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