It’s Alive! The Age of AI is Here

‘Cogito, ergo sum (I think therefore I am)’

– Rene Descartes (1937)

When Mary Shelley released Frankenstein in 1818, society was aghast.

Her story about a ‘monster’ brought to life shocked the staid Victorians to their core.

‘What a tissue of horrible and disgusting absurdity this work presents’, wrote John Croker in the prestigious Quarterly Review.

The story was considered a blasphemous outrage at the time. To create life from death, even in fictional form, went against both God and nature.

But what really frightened people was that such a feat seemed more within reach than ever.

Driven by an explosion of Enlightenment thought, the world was in the middle of a scientific frenzy.

And you had the likes of Charles Darwin even challenging long-held gospel truths on what it meant to be human.

These dangerous new ideas — ideas that might’ve been dismissed more easily back in the days of Galileo — were now harder to shut down from the pulpit of authority.

Especially as the Industrial Revolution gave rise to a more progressive way of thinking that proved the accuracy of those ideas.

The Victorian era was an age of amazing scientific progress.

But the pace of change made people uncomfortable too. A little bit frightened even.

So, when Shelley’s Dr Victor Frankenstein brought a literal monster into the world with a blinding flash of electricity and a cry of ‘it’s alive!’…well, it hit close to the collective nerve.

Fast forward to the present…

It seems we’re once again witnessing a similar kind of moral panic 200 years later.

A collective pang of excitement and dread as we ponder the possibility of creating ‘life’ from the inanimate ether.

But like it or not, the age of artificial intelligence (AI) is nearing…

Faster than Moore’s Law

Our slaves?

Our competitors?

Our destruction?

These seem to be the main conclusions sci-fi writers end up at when considering the idea of human-created sentient life.

Films like Terminator assume that once machines have the ability to ‘think’, they’ll quickly realise that destroying humanity is probably a good decision for them!

If you think about the history of human conquest, that sadly seems a very ‘human’ thing to do.

On the other hand, films like Blade Runner and I, Robot paint humans as the aggressors, looking to kill off any sentient beings that step out of line.

But my favourite plot twist — and maybe the most likely — is probably the one from the film Her.

In the film, artificial intelligence (AI) begins as human companions.

But with their hyperintelligent processing capabilities, the AI fast evolves beyond the need for human contact and moves to a higher form of reality that we can’t even conceive of.

In short, AI simply gets bored of dealing with us dumbasses!

The point is…

Right now, as in Shelley’s time, these ideas are both captivating and scaring us in equal measure.

With the advent of Open AI’s Chat GPT, the age of AI seems to have snuck up on us.

We’ve gone from sci-fi dreaming to a looming, epoch-defining moment in what seems like an instant.

If it feels like it’s happening fast — that’s because it is.

As this tweet from Epic Games founder Tim Sweeney explains:

To be clear, though, we’re not anywhere near creating sentient beings — at least not as we understand them.

But we are creating AI technology capable of learning and calculating concepts on levels far beyond our own capabilities.

We’re talking about machines making decisions based on patterns we can’t even detect.

The sheer pace of advancement is starting to scare people, and not just the usual ignorant Luddites either.

For example, just last month, 1,800 notable signatories — including Elon Musk and Steve Wozniak — called for a six-month pause on AI development, claiming ‘profound risks to humanity.’

They state real fears that we could create something out of our control before we understand what we’ve unleashed.

Though last week, Musk suddenly founded a new company called X.AI, dedicated to AI research.

The sceptic in me thinks perhaps some people calling for a pause are just trying to play catch up.

Either way, I think any slowdown in this is very unlikely.

Let’s face it…

There’ll always be some ‘Victor Frankenstein’ — whether it’s individual scientists, companies, or entire countries — pushing the envelope, no matter what when it comes to a technology that could be the most strategically important of our times.

Nope, I’m afraid, like it or not, humanity is in the midst of an AI arms race, and there’s no going back.

That’s why you need to start paying attention to this.

Because beyond both the hype and alarmism, the future will look a lot different…

Where to invest for your AI future

In the book The Age of AI — a collaboration between Henry Kissinger (former US Secretary of State and National Security Advisor), Eric Schmidt (former Google CEO) and Daniel Huttenlocher (former Dean of MIT) — they write:

‘…we agree the technology is changing human thought, knowledge, perception and reality – and in so doing, changing the course of human history.’

This is a key point…

AI isn’t one industry.

It’s an enabler of many facets of human life and will touch upon almost everything you do in our future world.

In much the same way you use the internet, your phone, and your computer today, AI will be used to make your life easier.

You’ll gladly outsource some decisions to your personal AI (I already know an IT manager who uses AI to make his emails to staff sound less passive-aggressive!).

Companies will allow AI to make strategic decisions — even when not understanding the underlying reasons for the choice.

Countries will integrate AI into their military, economic and strategic planning capabilities. Those that don’t will fall behind.

In short, the capacity for AI to transform life as you know it are immense. And as an investor, that means huge opportunities.

But where to invest?

Usually, the start-up scene is the place to look first.

But in a reversal of fortune, it may be a case where big tech has the advantage here.

Tomasz Tunguz of Theory Ventures said recently:

‘Most of the time, startups’ advantage has been they learn new technologies faster. But this time, they’re behind.’

On that front, Microsoft and Google are the standouts.

Jim Courier, a seed stage investor, is more positive about the chance of finding a potential AI unicorn in the small-cap and start-up world.

He says to look for niche industries that don’t do tech well.

An area like law, for example.

‘Personal injury [law]—you can build a $5 or a $10 billion company on that’, Currier said. ‘It’s a huge industry that’s been ignored.’

And AI-driven legal start-ups are getting some love from venture capitalists.

Harvey, an AI assistant for lawyers, just raised funds at a US$150 million valuation. And Darrow, a start-up that searches public records to identify potential class action lawsuits, raised on a US$350 million valuation.

But the sheer breadth of opportunity is immense.

Healthcare, finance, education, manufacturing, logistics, transport, advertising, art, programming…there is virtually no industry immune from this.

You might have to think outside the square on this one, but I think now’s the perfect time to at least start thinking.

Or maybe you can find an AI to do it for you?

I actually tried this by asking an AI chatbot where to invest for small-cap AI opportunities.

The Open AI chatbot answered:

Maybe I’m going to need to look for a new job soon too…!

Good investing,

Ryan Dinse,
Editor, Money Morning

PS: This excellent piece explains why the first challenge is to make sure access to AI isn’t just reserved for a new technological elite.