The first California gold rush started in 1848 - but now another is underway. Photo / Getty Images
OPINION
ChatGPT is changing the world as we know it, leaving some companies in its wake but whats the best investment option to capitalise on this new wave of technology-led disruption?
Dan Rosenweig, CEO of online education company Chegg, recently painted an alarming picture for investors.
Chegg provides homework help, digital and physical textbook rental, online tutoring and other student services.
Speaking to analysts on the latest earnings call, he said the significant spike in student interest from ChatGPT is impacting Cheggs ability to get new customers, as students opt to use the AI tool for assistance with homework instead.
The statement sent the stock tumbling, closing down 48 per cent in a single day and casting a shadow over the future of the company.
AI is in its infancy, but is already causing reverberations across many industries, capturing the minds and imaginations of scientists, politicians, and corporations, and bringing terms like ChatGPT to the forefront of public consciousness.
While it may be a blessing for many companies, potentially enabling significant productivity boosts, some may face existential risks to their business models.
New gold rush
Investors hoping to capitalise on the AI boom need to look no further than the gold rushes of the 19th century to figure out the best investment strategy.
Just as it was on the riverbeds of California, Victoria, and Otago in the 1800s, the best business was not in panning and digging for gold but rather in selling the miners the picks and shovels to do so.
Back then it was Levi Strauss and Jacob Davis who were in the box seat, but today with AI its the companies selling the tools and services that support the growing AI industry. With an early lead, Amazon, Google and Microsoft are well placed to play the enablers and backbones of the AI revolution.
Many companies have already been using AI for computational and quantitative tasks.
JPMorgan Chase bank and Mastercard are using AI to automate tasks like fraud detection and risk assessment, freeing up employees to focus on other things, and Netflix is constantly developing new AI-powered features to improve its recommendation engine.
The big recent innovation has been the wave of releases of Large Language Models (LLMs) such as ChatGPT. LLMs have moved AI beyond just numbers and quantitative tasks into language, creative content creation, and replicating human interactions.
Productivity software stands to benefit substantially.
For example, GitHub, Microsofts coding platform, rolled out its AI feature named Copilot, which aids developers code writing by offering autocomplete-style suggestions as they code.
There has often been a talk of 10x super developers who are 10 times more productive than the average developer.
GitHub CEO Thomas Dohmke strongly believes 10x developers can become widespread, saying: With AI at every step, we will realise the 10x developer.
Some business models could be upended by the technology
Chegg is one example of an early company impacted by AI, and companies with a large component of repetitive and manual tasks are also likely to be impacted.
Industries previously requiring people with specialist skills, such as copywriting and website design, can now use AI to help complete these tasks in minutes, rather than days or weeks.
Instead of using a copywriter, simple prompts can be fed into Word Copilot to generate full articles and content for publishing and advertising. Websites can be built simply by taking a photo of a hand-drawn website design and feeding this into an AI model.
This isnt necessarily a negative for these industries if they can use the productivity gains on more mundane tasks, and spend more time on value-add activities.
Satya Nadella, CEO of Microsoft, believes AI could enable every developer to focus all their creativity on the big picture: building the innovation of tomorrow and accelerating human progress, today.
The largest beneficiary from AI will be the cloud computing companies.
AI is computationally intensive. One conversation on ChatGPT costs only a few cents but when used by billions of people many times over, this cost escalates exponentially, and estimates put the daily cost at over NZD$1 million per day.
The lure of Azure
Amazon AWS, Microsoft Azure and Google Cloud Platform dominate the cloud computing market and AI has expanded their horizons significantly.
Only a handful of companies ultimately have the scale and ability to provide the computing infrastructure to host AI applications. Both Amazon and Azure have made large investments in building their own AI specific chips for training and running AI models more efficiently something smaller competitors are unlikely able to replicate.
These three providers are best positioned to capture the lions share of AI workloads, either through licensing their own AI models or providing the computing musclepower to host AI models from others.
Right now, AI is like the internet in the 90s, before smartphones, app stores, streaming and social media were on the radar of most people.
Current commercial adoption remains relatively low but there are unlimited use cases. Being invested in the picks and shovels like AWS, Azure and Google Cloud Platform could offer the greatest likelihood for success regardless of which platform or AI model dominates.
Like in the infancy of the internet, we can only guess what AIs ultimate size, impact and application will be, but what we do know is companies will have to adapt to harness the power of AI or risk being left behind.
- Daniel Moser is an investment analyst at Fisher Funds
Disclaimer: The information and opinions provided here are of a general nature, and not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.
Follow this link:
Fisher Funds: AI is changing the world but big winners could be the ... - New Zealand Herald
- Open source cloud computing slow to catch on, survey finds [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- Oracle CFO: no acquisitions needed to compete in cloud [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- IDC Survey: U.S. Corporations Aim to Tackle IT Challenges with Cloud Computing [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- Where does the ICO's new cloud guidance take you? [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- ChinaSoft International Signs Strategic Cooperation Agreement with Alibaba Cloud Computing to Develop PaaS Platform [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- IT Leaders Forum: Shedding light on cloud computing [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- Oracle Public Cloud Computing [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- Oracle Cloud Computing - Video [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- Cloud Computing 101 - Video [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- Lenovo Gets Into Cloud Computing - Video [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- Cloud Computing Certification Training | Cloud Computing Training By Simplilearn - Video [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- Cloud Computing - Video [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- Succeeding or Failing with Cloud Computing - Video [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- Demystifying the Cloud - Video [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- N: Cloud Computing, Syria PM Defects, US to Clean Agent Orange and MORE! - Video [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- Cloud Computing - Tv9 - Video [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- AWS 101 Cloud Computing Seminar-Bangalore - Video [Last Updated On: October 5th, 2012] [Originally Added On: October 5th, 2012]
- Trust - The Key to Cloud Computing Growth in Europe [Last Updated On: October 6th, 2012] [Originally Added On: October 6th, 2012]
- Cloud Computing Saves Health Care Industry Time And Money [Last Updated On: October 6th, 2012] [Originally Added On: October 6th, 2012]
- Synnex CEO Kevin Murai: Tablets, Mobile, Cloud Computing (p3) - Video [Last Updated On: October 6th, 2012] [Originally Added On: October 6th, 2012]
- Enterprise computing IS the cloud [Last Updated On: October 8th, 2012] [Originally Added On: October 8th, 2012]
- 44 Percent Of US Execs To Tackle IT Challenges Through Cloud [Last Updated On: October 8th, 2012] [Originally Added On: October 8th, 2012]
- ZapThink Announces Expansion of Cloud Computing for Architects Course [Last Updated On: October 9th, 2012] [Originally Added On: October 9th, 2012]
- Euro Zone Eyes Cloud Computing to Kick Start Economy [Last Updated On: October 9th, 2012] [Originally Added On: October 9th, 2012]
- Advantages, challenges of cloud computing discussed Oct. 10 at NJIT [Last Updated On: October 10th, 2012] [Originally Added On: October 10th, 2012]
- Dell Expands Cloud Client Computing Solutions for VMware View®, Desktop as a Service and Channel Offerings to Europe [Last Updated On: October 10th, 2012] [Originally Added On: October 10th, 2012]
- Cloud West to Focus on Entertainment Delivery, Network Infrastructure, and Investment, More at Nov. 8-9th Forum [Last Updated On: October 10th, 2012] [Originally Added On: October 10th, 2012]
- IBM, AT&T Offer Secure Passage to the Cloud [Last Updated On: October 11th, 2012] [Originally Added On: October 11th, 2012]
- Cloud computing company hits new fundraising heights [Last Updated On: October 11th, 2012] [Originally Added On: October 11th, 2012]
- Cloud computing firm hits new fundraising heights [Last Updated On: October 11th, 2012] [Originally Added On: October 11th, 2012]
- Cloud computing: here we go again [Last Updated On: October 11th, 2012] [Originally Added On: October 11th, 2012]
- Chinese Want to Put Computer 'Brains' in the Cloud [Last Updated On: October 11th, 2012] [Originally Added On: October 11th, 2012]
- CenturyLink Unveils Cloud Product [Last Updated On: October 12th, 2012] [Originally Added On: October 12th, 2012]
- Cloud Security Evolves in Wellington [Last Updated On: October 14th, 2012] [Originally Added On: October 14th, 2012]
- 2X ApplicationServer XG Joins the Intel AppUp SMB Service Hybrid Cloud [Last Updated On: October 15th, 2012] [Originally Added On: October 15th, 2012]
- Piston Cloud to Exhibit and Present at the 2012 OpenStack Summit in San Diego [Last Updated On: October 15th, 2012] [Originally Added On: October 15th, 2012]
- How to get your first cloud computing job [Last Updated On: October 15th, 2012] [Originally Added On: October 15th, 2012]
- DreamHost Adds Public Cloud Computing Service: DreamCompute [Last Updated On: October 15th, 2012] [Originally Added On: October 15th, 2012]
- Aryaka Receives 2012 Cloud Computing Excellence Award [Last Updated On: October 17th, 2012] [Originally Added On: October 17th, 2012]
- Making a Europe fit for the cloud [Last Updated On: October 17th, 2012] [Originally Added On: October 17th, 2012]
- Cisco Execs Plumb The Limits Of Cloud Computing [Last Updated On: October 17th, 2012] [Originally Added On: October 17th, 2012]
- Cloud firm invests in new network [Last Updated On: October 17th, 2012] [Originally Added On: October 17th, 2012]
- AirWatch Receives 2012 Cloud Computing Excellence Award [Last Updated On: October 17th, 2012] [Originally Added On: October 17th, 2012]
- Dell Extends Cloud Client Computing Portfolio with New Solutions Validated by Citrix [Last Updated On: October 17th, 2012] [Originally Added On: October 17th, 2012]
- Pano Logic and Alliance InfoSystems Join Forces to Deliver Zero Client Computing [Last Updated On: October 17th, 2012] [Originally Added On: October 17th, 2012]
- 5 Cloud Business Benefits [Last Updated On: October 17th, 2012] [Originally Added On: October 17th, 2012]
- Alteva Receives 2012 Cloud Computing Excellence Award [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- Open Text profit beats estimates on cloud services [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- Cloud computing improves nurse call system [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- Cloud computing: Top five tax considerations for your business [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- OKI and ISID to Provide Chemical Information System as Cloud Computing Services [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- As Mobile Grows, So Does Cloud Computing [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- IBM Analytical Decision Management SaaS - IBM Cloud TechTalk October 2012 - Video [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- JAX London 2012: Achieving genuine elastic multitenancy with Waratek Cloud VM for Java - Video [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- Microsoft 2020 technology future vision - Video [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- Infinity Cloud Point of Sale and Complete Retail Suite.mp4 - Video [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- Small Business IT Support, Computer Support, Web Design Atlanta - Video [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- Cloud Computing - Simplified - Video [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- How Allied Valve Used the Cloud to Expand in Bakken Oilfield - Video [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- Cloud Computing in the Public Sector - Video [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- Cloud Computing | Sacramento | Data Protection | IT Consulting | Symmetry Managed Servces - Video [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- The Business Value of Cloud Computing - Video [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- GYMNAZO Owner/Coach Michael Hughes is excited about edufii - Video [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- Automation in the age of cloud computing - Video [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- Cloud Computing.mp4 - Video [Last Updated On: November 1st, 2012] [Originally Added On: November 1st, 2012]
- Cloud computing in 2013: a conversation with Appcore's CEO [Last Updated On: November 3rd, 2012] [Originally Added On: November 3rd, 2012]
- Cloud adoption growing in India: study [Last Updated On: November 3rd, 2012] [Originally Added On: November 3rd, 2012]
- Eastday-Microsoft picks city for cloud computing [Last Updated On: November 3rd, 2012] [Originally Added On: November 3rd, 2012]
- Towards a blue sky: How SMEs can avoid Cloud Computing confusion [Last Updated On: November 3rd, 2012] [Originally Added On: November 3rd, 2012]
- Consultancy Services - Video [Last Updated On: November 3rd, 2012] [Originally Added On: November 3rd, 2012]
- Axxis Solutions Sponsors FIBA Technical Seminar on Cloud Computing - Video [Last Updated On: November 3rd, 2012] [Originally Added On: November 3rd, 2012]
- RightScale Webinar: 451 Research Webinar: Cloud Dos and Don'ts - Video [Last Updated On: November 3rd, 2012] [Originally Added On: November 3rd, 2012]
- Apple Technology (Vishwa Bandhu Gupta) - Video [Last Updated On: November 3rd, 2012] [Originally Added On: November 3rd, 2012]
- Mind Tree Ltd. - Video [Last Updated On: November 3rd, 2012] [Originally Added On: November 3rd, 2012]
- BIM Cloud Computing [Last Updated On: November 3rd, 2012] [Originally Added On: November 3rd, 2012]
- Entreda discusses cloud services for small and medium businesses - Video [Last Updated On: November 3rd, 2012] [Originally Added On: November 3rd, 2012]
- Austin IT Company | Computer Networking [Last Updated On: November 3rd, 2012] [Originally Added On: November 3rd, 2012]
- Cloud Computing and Services - After Effects Template - Video [Last Updated On: November 3rd, 2012] [Originally Added On: November 3rd, 2012]
- FieldStorm App Tour - Video [Last Updated On: November 3rd, 2012] [Originally Added On: November 3rd, 2012]
- The Hon Brendan O'Connor's speech: AccountRight Live launch event - Video [Last Updated On: November 3rd, 2012] [Originally Added On: November 3rd, 2012]