Home World The Risks and Rewards of Investing in Artificial Intelligence: Expert Analysis

The Risks and Rewards of Investing in Artificial Intelligence: Expert Analysis

Artificial Intelligence Investment: Risks and Opportunities


Artificial intelligence has entered the investment world with force since the beginning of 2023, thanks largely due to the emergence of the ChatGPT platform, which has unleashed a wave of AI-related stock purchases.

Despite the current rush, some analysts have warned of the risks of investing in artificial intelligence.

The Future of AI: Opportunities and Growth

Albion Financial Group chief investment officer Jason Weir says AI is “here to stay”.

“Maybe it’s getting a lot of sudden attention in these days, mainly due to ‘ChatGPT’. But the reality is that AI has been with us for many years, especially in the background through what’s known as ‘narrow AI.'” Ware cited Google Maps, Siri and other technologies.

And he expected continued support for AI, amid long-term “money-making” operations.

Weir added that developments in artificial intelligence, in especially machine learning, deep learning and natural learning will accelerate.

“I expect some large, high-quality companies to improve on AI innovations.”

High Valuations and Excessive Ratings

David Dietz, chief investment strategist at Peapack Private Wealth Management, says investors need to be “extremely careful” as company valuations have become “excessive”.

“More than half of the market gains questyear are due to AI shares. In numbers, it was 45%, or $1.4 trillion, of the total new market cap. One such example is Meta, where the company’s stock is up more than 100%. quest’year in part following a change The company’s focus shifts from the metaverse to artificial intelligence.

“Many companies have real AI plans, but they promote their AI exposure to improve stock prices and reputations,” he added.

He pointed out that “every company is now trying to engage in AI, and competition can keep the prices of AI-related services low.”

Regulatory and Privacy Issues

Dietz said AI has privacy and regulatory issues that need to be addressed, citing the example of “voice repetition.” “So when you put government regulations ahead of the competition, any extra profits could be squeezed out.”

Weir, on the other hand, said change is inevitable.

“Either you evolve with this change or you die. I believe companies need to evolve using artificial intelligence and using technologies in their business to improve their productivity and efficiency and to help grow their business. This is where we want to be , with some quality leading companies”.

“Regulation isn’t new anyway,” he explained, noting that tech companies have “been in control of regulation for a long time.” intelligence, not on government regulation as sort of a contributor to earnings over time.

Investing in AI

One thing Dietz and Weir agree is to avoid investing in companies that focus solely on AI.

Dietz is skeptical about investing in artificial intelligence but has one piece of advice for those who are still enthusiastic: “During the gold rush, people often made money by investing in companies that provided various services. Invest in those companies that provide the tools for a technology sector in more expansion. “”.

“For these big tech companies, AI will be a small part of total revenue and profit, so it’s safer, even if the returns will be lower.”

On the other hand, Weir said, “Don’t invest in companies that focus only on artificial intelligence, that have no profits and now have high capital costs. This is speculation, not investment.”


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