AI Adoption

AI Adoption

 

AI is the topic of the year, and last year for that matter. Theamount of potential and shifting in business and personal use issignificant. There are plenty of experts saying that we are in theearly stages of AI adoption, and in many ways that is true.However, we are seeing a large percentage of the population useAI for some purpose even now when we are 3 years into it(ChatGPT launched in November 2022).

 

When we look at the internet and how quickly that was used,most of us remember the limited utility of the internet. Now themajority of Americans use the internet like we use electricity. Ifit stops working, we are idle and unproductive. We have clearlynot made it to that phase of AI adoption. Most businesses woulddo fine without AI. They may have a little extra workload, butthey would not be fundamentally handicapped like they wouldbe if they lost electricity.

 

That tells me that AI is exciting and new, but it is not fundamental to the economy, YET. I can tell that AI will get to a much deeper level of integration in our everyday lives over the next 20 years. The AI adoption rate is only part of the story. The full utility of AI will come only as more applications are created to utilize AI. This can take the form of robotics, computer programs, etc.The challenge for investors is not in seeing the future in 20 years. That will likely be highly driven by AI.

 

The challenge is identifying winners, losers, and if there is an AI bubble on the horizon. Predicting the tech bubble of 2001 would not have told you that Amazon’s value would have grown 50x over the past 25 years. It would have only told you that it would lose over 90% of its value in the tech bubble.

 

If we do have an AI bubble, it could look very similar to 2000-2002, but many things will be different. Long-term, the winners will see significant success as the AI adoption continues even after the theoretical bubble occurs.