The AI Revolution

Artificial intelligence (AI) is a combination of many different technologies working together to enable machines to sense, understand, act, and learn like human minds. And whether we like it or not, this technology is increasingly used in many aspects of everyday life from chat bots, to getting a loan, to self-driving cars. Take ChatGPT for example, it’s one of the fastest-growing applications ever, reaching 100 million users in just two months.

As technology advances, we are constantly discovering new ways to push the boundaries of what we thought was possible. And AI has the potential to not only change the way we interact as human but also the way financial markets and global  economies work, for years to come.

This huge movement in technological innovation also creates new opportunities to invest by opening up new industries and making existing one’s more efficient.  These new opportunities offer areas of potential growth and with that the potential for returns.

As with an investment it is important to understand that the value of your investment will go down as well as up and you may get back less than you invested.

Let’s look at an example of how AI being used practically to help to shape the future and lives of families in Africa.

Agriculture remains the main source of income for many households in sub-Saharan Africa. Not only does it generate money for families, agriculture, contributes around 23% of sub-Saharan Africa’s GDP, and employs more than 60% of its population*. 

Today, Africa’s agricultural systems have never been more vital, especially in the wake of a changing climate. Self Help Africa is a charity that has been using AI and technology to help create sustainable practices and improve the lives of farmers. Here’s just a few examples;

• Special software has been developed that’s able to use satellite imagery to detect, the invasive Fall Armyworm caterpillar threatening millions of acres of maize crops.
• Remote sensing software has been created to manage forests and assess carbon stocks in African forests and farms.
• A smartphone app that uses AI technology is being used to detect viral disease in cassava crops, long before it is apparent to the human eye.

All of these developments offer the potential to have a significant impact on African agricultural industry.

AI’s ability to measure, learn from and detect patterns in data will allow certain industries to optimises their operations and become more efficient.  For example, let’s look at a water board supplying water to a city.  AI can be used to identify changes in usage and abnormalities within the data. So for example, if spikes in usage occur and it is not part of the usual pattern it may suggest a water leak.  Flagging this early reduces the chance of more damage and minimise water waste.  AI can also be used to predict water demand and improve distribution.

If we look at something like transportation, AI can be used to study traffic flow, reduce congestion and enhance road safety. One of the ways AI is expected to help with road safety is through advanced driver assistance systems (ADAS). These systems use cameras, sensors, and other technologies to assist drivers with tasks such as lane keeping, automatic emergency braking, and adaptive cruise control.

Despite the opportunities it may offer, many are concerned by the growing use of AI and have safety concerns about its regulation and potential mis use.

Last year the former Prime Minster, Rishi Sunak, established the world's first AI Safety Institute.

The institute is responsible for conducting research and building infrastructure to test the safety of advanced AI and to measure its impacts on people and society. They also work with the wider research community, AI developers and other governments to affect how AI is developed and to shape global policymaking on this issue.

And it is a global issue, AI does not respect borders and a number of other countries have since launched their own AI Safety Institutes, including the US, Japan and Singapore.

As with any technological advancement there is still a lot to be worked through, explored and regulated.

It’s clear AI has the potential to drive innovation and create new opportunities.

The former Chanceller, Jeremy Hunt, said ‘developing this computing power also benefits society beyond lifting economic growth, helping us tackle climate change and power the discovery of new life saving drugs’.

The UK is also not the only country seeing increasing and significant investments in AI with, for example, Saudi Arabia, making clear its ambition to invest heavily in technology. Global players like Microsoft, Google, Oracle, Meta and Apple are all investing in the Kingdom, attracted by its deep pockets, high internet usage and plans for the future.

With this in mind, it’s no surprise that Stocks related to AI have become increasingly popular in recent years, as investors look to make returns on the potential growth. However, investing in stocks related to AI technology, as with any other investment, comes with risks and considerations. For example, these types of investments can be particularly volatile due to rapidly changing and shifting consumer demands.

Whether you trust AI or not, it’s certainly going to make an impact on the world, the economy and the future.

Before making any investment decisions it’s always important to do your research and think about the risks you are willing and able to take.

The views expressed in this document should not be taken as a recommendation, advice or forecast. If you’re unsure about any aspect of investing you should speak to a financial adviser.

* Source: Self Help Africa, 2024