Cathie Wood has a new thing to watch, thanks in part to the public’s recent fascination with ChatGPT.
Generative AI chatbots have sparked massive public interest in AI, sparking concern about the possibility of robots writing term papers, entertainment in robot-created fiction, and renewed interest in AI. Microsoft’s Bing search engine.
But Cathie Wood of Ark Invest says the real promise of new wave AI technologies lies in their ability to improve productivity.
“AI will enable the largest productivity gains in our history,” she told Yahoo Finance Live. “The increase in productivity will be astounding and astounding.”
The consumer-facing portion of ChatGPT, which may have entered the brunch conversation, will have a bigger impact on professional coders, Wood and her team write in their “Big Ideas 2023” report.
Artificial intelligence “is catalyzing all kinds of change across industries, and I don’t think investors have done enough research on the profound extent of this impact,” the report said. “I think the market is scrambling to try and understand how AI is going to impact the world.”
Ark’s report predicts some big numbers: “By 2030, AI should more than quadruple the productivity of knowledge workers. At 100% adoption, AI could boost global labor productivity by around $200 trillion, making knowledge That dwarfs the roughly $32 trillion in total worker wages.”
Such predictions are by no means certain, as the technology is still in its infancy and the predictions are based on many assumptions. For example, the technology has faced controversy over programming racial bias, while ChatGPT’s work is often riddled with inaccuracies.
On the other side is the concern that artificial intelligence will replace human jobs. Eric Brynjolfsson, director of the Stanford Digital Economy Lab, has written about the “Turing trap” of artificial intelligence displacing workers rather than augmenting and assisting them, triggering rising inequality.
Wood is taking an indirect approach to investing
How AI will change the global economy and culture is the big question, and then where investors can look to capitalize on its growth.
In Wood’s Benchmark Portfolio (ARKK), you won’t find any companies with “AI” in their name. Instead, she’s been looking for companies that integrate artificial intelligence and data analytics into their operations.
Wood highlighted her ETF’s largest holding — Tesla (TSLA ) — as an example. It has one of the “world’s largest pools of real-world driving data.” So we believe it will have a leading position in the robo-taxi platform opportunity, which is a software-as-a-service opportunity with huge margins. “
Ark’s other large holding company, Exact Sciences, is using AI to analyze medical data to detect cancer, she said.
Ark is betting that these long-term big ideas will reignite returns. While Wood emphasized that her company has at least a five-year investment horizon, it has had a brutal 2022, plunging 67% after dizzying gains in 2020 and early 2021.
“We think this chapter is over. You can never say the coast is sunny – there are always risks. But we think we are on the other side of the most difficult period that an innovation-led strategy has ever seen. “
Julie Heyman is co-anchor Yahoo Finance Live, weekdays 9-11 a.m. ET. Follow her on Twitter @juleshymanand read Her other stories.
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