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Some 5,000 scientists, academics, industrialists, and others have signed a petition calling for a six-month moratorium on the development of artificial intelligence (AI). Another 50,000 people are reportedly lined up to add their names.
The idea for the pause is to allow the world to formulate guidelines and rules for how AI is to be expanded and controlled in the years ahead. The proponents of the pause feel that without tight monitoring, we risk being overtaken and crushed by our own creation. A digital Frankenstein’s Monster! Our only hope is to control it before it controls us.
It's a laudable idea. It’s also totally impractical. Is China going to halt its AI programs? Is India? Is Israel?
Do we expect Microsoft to stand pat while Google forges ahead?
And even if we could somehow persuade all these entities to sign on, how exactly would the moratorium work and what would be the end result? A United Nations resolution? The UN hasn’t unanimously agreed on anything since it was created at the end of World War II.
Yes, we do need some controls on AI. But stopping development for six months will do nothing except give cheaters an edge. What will work? No one has found a realistic answer yet. Perhaps we should go back to the three laws of robotics that science fiction author Issac Asimov created in a 1942 short story. They are:
The problem is that these laws don’t cover many of today’s concerns. There is nothing to prevent AI from stealing human jobs. AI can be used to cheat your way through school without violating Asimov. It could be argued that AI is free to develop its own intelligence far beyond human capabilities. We’re in uncharted territory.
While great minds try to solve this conundrum, the rest of us are left to consider how we can profit from this dizzying new branch of science. What better way to find out than to go right to the source. I posed the question to ChatGPT. Here’s an edited version of its reply.
“Investors can profit from the development of AI by investing in companies that are at the forefront of the AI industry or are integrating AI into their products and services. Here are some examples:
“Overall, investors should conduct thorough research and due diligence before investing in any AI-related companies or funds. The AI industry is still in its early stages and investing in AI-related companies can be highly speculative and subject to high volatility.”
That’s a reasonable and responsible look at the broad AI investment landscape, complete with warnings about risk and speculation. It was generated in less than a minute after the question was submitted. Impressive. Scary.
What about the quality of the advice? Google (Alphabet), Microsoft, Amazon, IBM, and Nvidia are all on the Internet Wealth Builder recommended list, and all have been profitable. Alphabet announced last week that it plans to incorporate Chat AI into its Google search engine this year. Microsoft is already using ChatGPT in its Bing search engine. So much for a moratorium!
ABB, Pfizer, and Medtronic are also on our recommended list, although the latter is down from its recommended price. IBM Watson Health is not publicly traded.
Fanuc is a Japanese-based company that is the largest maker of industrial robots in the world. Besides Japan, it has operations in the U.S. and Europe. The shares trade on the U.S. over-the-counter market under the symbols FANUF and FANUY.
Kuka manufactures industrial robots in Germany but is 96% owned by the Chinese company Midea Group. It’s listed on the OTC market as KUKAF, but there appears to be no active trading.
Neither BOTZ nor ROBO are on our recommended list. Both ETFs have similar charts. They reached their all-time highs in 2021, then went into a deep slide. They’ve recovered this year, with BOTZ up about 19% year-to-date while ROBO has gained about 14%.
Both these ETFs look interesting in the current environment. Their prices aren’t cheap, but ROBO has the lower p/e ratio at 27.4. BOTZ has a slightly better average annual return since inception. Either would be a good choice if you want an ETF in the AI sector, but my preference would be to buy shares in Microsoft, Alphabet, and/or Nvidia.
Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investor newsletters, which are available through the Building Wealth website. To take advantage of a 50% saving on a trial subscription and receive the special report “The Tumultuous Twenties,” go to https://bit.ly/bwGP20s.
Follow Gordon Pape on Twitter at https://twitter.com/GPUpdates and on Facebook at www.facebook.com/GordonPapeMoney.
Notes and Disclaimer
Content © 2023 by Gordon Pape Enterprises. All rights reserved. Reprinted with permission. The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.
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