Artificial intelligence has tremendous growth potential.
Articles

The Whys and Hows of Investing in Artificial Intelligence

Artificial intelligence has tremendous growth potential, because most sectors are likely to be working with AI in the future. Investors can benefit from certain companies in particular.

Artificial intelligence (AI) is an integral part of digitalization. The progress made by the IT industry in collecting, analyzing and managing data in real time now enables us to make intelligent machines and computer programs that can learn by themselves and solve problems that previously required human intelligence.

AI is expected to touch most industries one way or another, as it is believed to significantly improve productivity, cut costs and provide a competitive advantage. According to research by Statista, worldwide AI revenue should grow by a CAGR 2016 – 2025E of around 57% to USD 36.8 bn.

The Investment Trends That Result from Artificial Intelligence

Autonomous vehicles, speech recognition and natural language processing are currently in focus with products such as Amazon’s Alexa or Google’s home assistant gaining immense popularity. While these large companies are expected to maintain their lead, there is also a strong ecosystem for AI-related start-ups that have attracted strong interest from venture capitalists.

From an investor standpoint, we believe it makes most sense to focus on “enablers” (companies which provide products / systems that facilitate IT solutions/services e.g. semi.conductor companies etc.) that, in our view, will be the first to benefit from the expected growth in AI usage and machine learning.

Other beneficiaries are the cloud platform providers that already offer “AI as a service” platforms on which companies can build their own tailor-made AI solutions. A third group of enablers are IT service companies, which could benefit from rising corporate demand.

Sectors with the Most Investment in Artificial Intelligence in the Future

According to market researcher IDC, the area of software & services is expected to attract close to half of all AI revenue, with a focus on applications such as text/media analytics, search, visualization and navigation, as well as cognitive software platforms. Of the sectors, financial services and healthcare have been the first sectors to invest heavily in AI over the past decade due to the vast amount of customer data these institutions possess.

Rising revenues in artificial intelligence

Related Articles

  1. US stock markets are on the rise. What lies behind it?

    US stocks: The bull market continues
    The rally on US stock markets seems unstoppable. There's nothing unusual about that, however – at least from a historical point of view. In addition, the US has unique locational advantages – its economic strength, innovative capacity, risk culture, and also geopolitics. Read the article to find out why the US bull market is likely to continue, and what investors should bear in mind.

  2. Let the good times roll – 12 reasons to be confident

    Swiss economy in 2024: 12 reasons to be confident
    Many optimistic assessments from the beginning of last year were proven to be well founded in 2023. Yet what were deemed by some to be controversial views at the time have become the market consensus, as is often the case. Inflation is falling, the economy is flourishing and cash flows are higher than ever. For the coming year there are an additional dozen reasons to be confident.

  3. The force of the better idea: A driver of the economy

    Risk capital: Catalyst for innovation
    In turbulent times, it is worth looking at what really drives society and the economy forward in the long term: the force of disruptive innovation, in other words the force of the better idea. With risk capital behind it, this force can bring about new developments, thus driving progress. Read how innovation creates economic resilience and what opportunities thematic investments offer for next year and beyond.