AI and the Investing Landscape

We had a fascinating conversation on the investment landscape for Artificial Intelligence (AI) with Marc Nabi of Capital Group on Wednesday. You can watch the 45-minute conversation below.

Highlights included:

• Many giant tech companies like Microsoft, Amazon, Meta, and Google have first-mover advantages due to their decades of user data (which fuels AI improvements) and immense capital advantage.

• AI is expected to have a broad impact across industries beyond tech, including healthcare, energy, and financial services. It may also impact the global supply chain – semiconductors, data centers, cooling systems, and copper.

• A few companies have captured most of the market and outsized returns in recent technological shifts, like e-commerce, social media, and cloud computing.

• Perhaps there will be an ecosystem of upstarts that build an “application layer” on top of AI and leverage that to disrupt incumbents.

• Today’s leading AI companies are highly profitable and have robust infrastructure in place, unlike the cash-burning startups of the late 1990s Dot-Com era.

• Discussion on the impact of AI on labor markets - some job displacement but also retraining/upskilling opportunities like what happened with robotics in the automotive industry.

The excellent slide deck that we reviewed can be found here.