Investing in AI Technology: Methods and The 5 Best Companies to Invest In

What is AI and how is it used?

AI, or Artificial Intelligence, is a term that talks about machines or systems doing things that usually need human smarts, like thinking, learning, choosing, and solving problems. There are two kinds of AI: narrow AI and general AI.

Narrow AI is what we see every day, like talking to voice assistants, using facial recognition, or seeing self-driving cars. It's made to do specific jobs, and it usually learns from data through something called machine learning, where it learns patterns and predicts things.

General AI, though, is the kind that can do any job a person can do, but we're still figuring out how to make that happen. It's a big idea but hasn't become real yet.

AI is used for various purposes and applications, such as:

💡 Making work faster and better

AI can make tasks and processes quicker and more effective, like in manufacturing, shipping, helping customers, or handling money. This saves time, money, and resources.

💡 Doing things more accurately

AI can look at and understand a lot of data, like pictures, videos, words, or sounds, and give helpful insights or solutions. This helps reduce mistakes and biases.

💡 Creating new stuff

AI can come up with new and creative things, like art, music, or stories. It also helps make cool new features, like virtual reality, augmented reality, or understanding human language.

💡 Solving tough problems

AI can take on big challenges we face, like climate change, healthcare, education, or keeping things safe. It helps find solutions to these complex problems.

Benefits and risks of investing in AI

👍Investing in AI can offer several benefits, such as:

• High growth potential
• Competitive advantage
• Social and environmental impact

🟢 High growth potential

Artificial Intelligence (AI) is changing and growing quickly, with new things happening all the time. It's also supposed to make a big difference in many areas, bringing new chances and value. A report by PwC says that AI might add up to $15.7 trillion to the world economy by 2030, which is more than what China and India together make right now.

🟢 Competitive advantage

Artificial Intelligence (AI) can give businesses and investors an advantage by making them better, faster, and more innovative. It can also make it tough for others to compete because it's hard and expensive to copy or do better. A McKinsey survey found that companies using AI usually make more money and have a bigger share of the market than those who don't.

🟢 Social and environmental impact

Artificial Intelligence (AI) can make a positive and important change in our society and the environment. It can help fix some of the most important problems we have, like poverty, disease, hunger, or pollution. AI can also make the lives of many people better, especially those who don't have as many advantages or who are often left out.

👎However, investing in AI technology also involves some risks and challenges, such as:

• Ethical and legal issues
• Technical and operational issues
• Market and financial issues

🔴 Ethical and legal issues

AI can cause some problems that we need to think about. For example, AI can make us lose our privacy, security, or rights. AI can also hurt us or treat us unfairly. AI can also do things that we don't want or expect, such as taking our jobs, changing our economy, or making us act differently. A report by a group of experts says that AI can also make new kinds of trouble, like fights, chaos, or unfairness.

🔴 Technical and operational issues

AI can also have some problems that make it hard to work. For example, AI needs good data to learn from, but sometimes the data is bad, missing, or hard to get. AI also needs good rules to follow, but sometimes the rules are wrong, weak, or hard to understand. AI also needs to work well with other systems and people, but sometimes it does not fit, grow, or talk well. AI can also make mistakes or break down, or someone can mess with it or hack it.

🔴 Market and financial issues

AI faces different problems in the market and finances. These include things like rules, making things standard, and how things are controlled, as well as competition, changes, and swapping out things. Also, AI can be influenced by things happening outside of it, like what people like, what's normal in society, or what's happening in politics.

The biggest risk when you invest in AI is that we don't know for sure how it will grow and be used. The technology might get better faster than the rules can keep up with, causing worries about what's right and wrong and how it might be misused. Also, because AI is changing so quickly, some investments might not be useful anymore, or you might have to keep changing things to stay in the competition in the market.

How can you invest in AI and what are the best 5 AI companies?

There are different ways and strategies to invest in AI, depending on your goals, preferences, and risk appetite. Let's highlight the most common and popular methods.

Investing in AI stocks

Investing in AI stocks is the most direct and simple way to invest in AI, as it involves buying ownership stakes in companies that develop, produce, or use AI technologies, products, or services. However, buying stocks or shares of AI companies also requires doing extensive research and analysis, as well as monitoring and managing your portfolio, as the AI market is highly volatile and competitive.

The 5 best companies for investing in AI are:

1. Alphabet (GOOG)
2. Microsoft (MSFT)
3. Amazon (AMZN)
4. NVIDIA (NVDA)
5. Tesla (TSLA)

Buying exchange-traded funds (ETFs) or mutual funds that focus on AI

This is a more indirect and diversified way to invest in AI, as it involves buying shares of funds that track and invest in a basket of AI-related companies, sectors, or indices. This can reduce the risk and cost of investing in individual stocks, as well as provide exposure to a broader and balanced range of AI opportunities and trends. Some of the best AI ETFs or mutual funds to invest in are:

• Global X Artificial Intelligence & Technology ETF (AIQ)
• ARK Innovation ETF (ARKK)
• ROBO Global Robotics and Automation Index ETF (ROBO)
• iShares Robotics and Artificial Intelligence Multisector ETF (IRBO)
• Fidelity Select Artificial Intelligence and Automation Portfolio (FSCAI)

Global X Artificial Intelligence & Technology ETF (AIQ): This ETF seeks to track the performance of the Indxx Artificial Intelligence & Technology Index, which consists of companies that are involved in the development or utilization of AI technologies, such as software, hardware, or services.

ARK Innovation ETF (ARKK): This ETF seeks to provide long-term growth of capital by investing in companies that are expected to benefit from the development and adoption of disruptive and innovative technologies, such as AI, robotics, biotechnology, or blockchain.

ROBO Global Robotics and Automation Index ETF (ROBO): This ETF seeks to track the performance of the ROBO Global Robotics and Automation Index, which consists of companies that are engaged in the design, production, or use of robotics and automation technologies, such as AI, machine learning, or computer vision.

iShares Robotics and Artificial Intelligence Multisector ETF (IRBO): This ETF seeks to track the performance of the NYSE FactSet Global Robotics and Artificial Intelligence Index, which consists of companies that are involved in the production or use of robotics and AI technologies, products, or services, across various sectors, such as industrial, health care, or consumer.

Fidelity Select Artificial Intelligence and Automation Portfolio (FSCAI): This mutual fund seeks to provide capital appreciation by investing in companies that are expected to benefit from the growth and development of AI and automation technologies, products, or services, across various industries, such as information technology, industrials, or communication services.

Buying cryptocurrencies or tokens that are powered by AI

This is a more novel and speculative way to invest in AI, as it involves buying digital or virtual currencies or assets that are based on or enhanced by AI technologies, protocols, or networks. This can offer a high potential return, as well as support the innovation and democratization of AI. However, this also involves a high risk and volatility, as well as a steep learning curve, as the cryptocurrency and token market is still nascent, unregulated, and complex. Some of the best AI cryptocurrencies or tokens to invest in are:

• SingularityNET (AGI)
• Ocean Protocol (OCEAN)
• Fetch.ai (FET)

SingularityNET (AGI): This is a decentralized and open-source platform that aims to create a global network of AI agents that can communicate, collaborate, and exchange services with each other, as well as with humans. SingularityNET allows anyone to create, share, or monetize AI services, such as natural language processing, computer vision, or machine learning. SingularityNET also hosts the development of Sophia, a humanoid robot that uses AI to interact with humans and express emotions.

Website: https://singularitynet.io

Ocean Protocol (OCEAN): This is a decentralized and open-source protocol that enables the sharing and monetization of data and AI services, while preserving privacy and security. Ocean Protocol connects data providers, consumers, and AI developers, and allows them to exchange data and AI models, as well as access compute and storage resources, using smart contracts and tokens. Ocean Protocol also supports the development of data marketplaces, where data and AI assets can be discovered, priced, and traded.

Website: https://oceanprotocol.com

Fetch.ai (FET): This is a decentralized and open-source platform that combines blockchain, AI, and multi-agent systems to create a digital world where autonomous software agents can perform useful economic tasks, such as data collection, analysis, or optimization. Fetch.ai enables the creation of smart contracts that can self-organize, learn, and adapt, as well as interact with humans and other agents. Fetch.ai also supports the development of collective learning networks, where agents can collaborate and share data and AI models, without compromising privacy or security.

Website: https://fetch.ai

How to Invest in AI Smartly and Safely

Investing in AI can be a rewarding and exciting venture, as it can offer high growth potential, competitive advantage, and social and environmental impact. However, investing in AI can also be a challenging and risky endeavor, as it can involve ethical and legal issues, technical and operational issues, and market and financial issues.

Therefore, before investing in AI, you should do your homework and research, and consider the following factors:

📌Your goals and preferences: You should define your investment objectives, such as your time horizon, risk tolerance, and expected return. You should also identify your investment style, such as your level of involvement, expertise, and diversification.

📌Your options and strategies: You should explore the different ways and methods to invest in AI, such as buying stocks, ETFs, mutual funds, or cryptocurrencies, and compare their pros and cons, such as their performance, fees, liquidity, and volatility.

📌Your sources and resources: You should consult reliable and reputable sources and resources to get information and guidance on investing in AI, such as financial advisors, analysts, experts, or platforms, and avoid scams, frauds, or hype.

By following these tips and recommendations, you can invest in AI smartly and safely, and enjoy the benefits of this emerging and transformative field.