The impact of ChatGPT and AI on Investors & Investments

I am sure you have, somehow, heard of ChatGPT (Advanced artificial intelligence (AI) chatbot) that can comprehend and produce human-like discourse. A neural network, a type of computer program that simulates how the human brain functions, is the foundation of the transformer algorithm that ChatGPT employs.

The NYSE FactSet Global Robotics and Artificial Intelligence Index has returned 19% since the introduction of GPT on November 30, 2022, surpassing the S&P 500 by more than 10%, indicating that investors are aware of the potentially transformational implications of artificial intelligence. Even though businesses have considerably improved their use of artificial intelligence over the past 20 years, innovations like ChatGPT have the potential to upend a number of markets and open up investment opportunities. In fact, experts predict that the worldwide AI market will grow by twofold, to $900 billion, between 2022 and 2026.

Artificial Intelligence References in S&P 500 Transcripts?

We see two ways generative AI, which is still in its infancy, could revolutionize the world.

1. Search: The search engine approach, which has dominated digital information gathering since the 1990s, could be overturned by generative AI. Today's search engines are dependent on digital advertising spending, which enables businesses to market products in response to certain search enquiries (such as "what should I see in Barcelona while on vacation?"). If there are fewer incentives for individuals to click on advertising links, that is, if generative AI can do away with the need for a search engine intermediary and give content directly to consumers, the $681 billion digital advertising market could be disrupted.
2. Services Sectors: Generative AI is capable of a wide range of jobs now carried out by humans. It is capable of everything, including creating intricate lines of code, translating and transcribing languages, and even suggesting outfits for a specific situation. Technology, education, and retail are among the industries that have been touched, but it's not hard to think that other parts of the economy, like healthcare, have also been affected. (Stop waiting days for a doctor to contact you back and explain the results of an MRI!) Companies that can develop artificial intelligence (AI) solutions that improve productivity and efficiency could gain given that the U.S. still has a 4 million-worker labor shortage and that aging populations globally pose a danger to the availability of labor in the future.

What Effect ChatGPT Could Have on Investors?

The language model ChatGPT has the ability to have a range of effects on investors. It can be applied to tasks like sentiment analysis and news summaries through natural language processing. This may help investors make better selections by giving them a better knowledge of the general sentiment and important data pertaining to a specific stock or market.

ChatGPT can also be used to generate content, such as financial reports or transcripts of earnings calls. Investors may be able to save time and resources by using this instead of analyzing financial data. Overall, ChatGPT may improve efficiency in the processing of financial data and assist investors in making better judgements.

Ways To Invest In The AI Theme??

Investors seeking to invest in artificial intelligence companies might want to think about ETFs that hold pure-play businesses that span the entire artificial intelligence value chain, focusing on both AI developers and AI enablers.

• AI developers: Artificial intelligence (AI) developers are businesses that create different types of AI, such as generative AI, natural language processing, pattern recognition, or predictive analytics.
• AI enablers: Companies that create various types of technology, such as cloud services or AI-focused chips, that facilitate the development of AI are known as AI enablers.

Not all generative AI products are generating news, including ChatGPT. Digital images are produced by DALL-E based on user comments. Check out the artwork DALL-E produced in response to the request to "paint us a picture of your favorite futurist inventor" below.

DALL-E technology has significant ramifications for the creative sectors of the economy, like the arts and entertainment, which were once considered to be immune to the effects of AI.

Character.AI is another generative AI service that enables users to chat with an image of any person, living or deceased, real or made-up. Due to the fast-moving nature of the industry, we are seeing more and more novel applications for AI technology.

The ultimate aim is to develop multi-modal AI, or a program that can understand and learn from audio, time-based, and spatial data in addition to text. Examples of such programs include ChatGPT and Dall-E. All of these "types of intelligence" can be combined to create an artificial intelligence that is incredibly versatile and helpful.

Conclusion?

ChatGPT may be the most impressive AI instrument to date, 66 years after the Dartmouth workshop at which artificial intelligence was first developed. We, as investors and financial advisors,? think that GPT and other types of AI could continue to have a significant impact on a large portion of the economy, even though novel use cases are still being found. Investors interested in AI might want to think about ETFs that offer exposure to pure-play companies throughout the theme's value chain.