We sat down with three of our technology experts to get their thoughts on the opportunities in artificial intelligence (AI):
AI has become top of mind for investors and the market more broadly. What has been the driver of this narrative shift?
Sanjay Devgan: People have been trying to model human intelligence in computer systems for 30-plus years. What’s interesting now is the confluence of computing power, connectivity and storage – those are the fundamental building blocks.
On the compute side, we went from millions of transistors to tens of millions, to hundreds of millions, to billions – so compute power has increased exponentially. If we’re talking about connectivity, we are now shipping switches that are capable of supporting 25.6 terabits per second (one terabit is a trillion bits per second). Next year, we are going to start shipping 51.2 terabit switches.
And then you’ve had a coincident increase in memory capacity. This confluence allows you to run the calculations required for AI. If you boil it down, AI literally is just billions and billions of calculations, just simple math matrix multiplication. But you need to do it many times and then you need to bring that back. The calculation isn’t complex. It’s just the number of nodes needed to process it is massive.
Rahul Narang: AI has been topical for several years, but the inflection started tohappen last year when companies finally had the computing power and the data to harness more performance from deep neural networks. OpenAI released ChatGPT in late November for public use, which received widespread media coverage and investor interest.
Paul Wick: ChatGPT was the opening salvo. And then it turned out literally a week or two later that Microsoft had invested $10 billion to gain a controlling stake in OpenAI, and that raised a lot of eyebrows.
Narang: I should say that while it seems like AI is a new thing, it’s not new to us. It’s been something we have been researching and investing in for many years with the help of the deep bench of central research analysts at Columbia Threadneedle Investments.
How does the advent of AI compare to things like the launch of the internet, cloud-based computing or mobile devices?
Wick: I think the advent of generative AI, and AI in general, is going to rival the advent of the internet and mobile computing as a significant trend in the technology marketplace. One area in which it’s going to be a little bit different is that it is not necessarily a distribution engine. So, you think about the internet and mobile devices – you’re able to consume games, do commerce online and view advertisements. Those developments were big distribution developments as well as new technology developments. Generative AI, I think, is going to be a very powerful tool for knowledge workers in particular, and I think it’s going to make the internet just easier to use and much more powerful.
Narang: We are viewing AI as the next platform transition. We had PCs, the internet, the mobile era and cloud computing, and now we’re seeing AI. Similar to how some of these other technologies had a lasting impact on the global economy, we expect AI to add $7 trillion of global economic impact over a 10-year period.
What are some of the areas of opportunity in AI that you are excited about?
Narang: The speed of innovation from companies around AI is breath-taking. We are seeing a faster cadence of product releases that is helping create better products for end-users. For example, Microsoft has released several co-pilots that could help drive productivity gains when writing code. Other areas where we see AI used by companies are in customer service, IT help desks, content creation, fraud detection, supply chain optimisation as well as predictive maintenance.
The emergence of AI in health care is reshaping how patients are diagnosed, treated and monitored. Nvidia is doing a fair amount of work here. Specialised large language models should help speed up the discovery of life saving drugs. We also expect to see more advanced use cases in autonomous driving and robotics over time.
Devgan: There are obviously a lot of great tangible things that you can point to today. But I don’t think the really big thing has been developed yet. I think it’s going to be somebody, you know, some kid sitting in his college dorm asking “How do I leverage this?”. If we go back to the transition from 3G to LTE and cellular handsets, I remember as a consumer I would just look at the web on my phone thinking, why do we need LTE? But you had businesses like rideshare applications, things like Uber and Lyft that could not exist in the 3G realm and that came to fruition because of that advance.
How fast do you expect to see these AI-related changes unfold?
Narang: The speed of change is hard to predict, but so far it is fair to say this has been faster than most investors expected – ChatGPT reached 100 million users quickly, and Nvidia recently delivered quarterly results with guidance a few years ahead of schedule. We continue to expect sporadic breakthroughs as the technology evolves.
