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| By Sean Brodrick |
I, for one, welcome our artificial intelligence robot overlords.
I just wanted to get that out there in case some AI/Skynet monstrosity is scanning the internet, thinking about culling the herd.
I had a conversation about AI with my lawn guy. Now, before you laugh, he’s really smart and well-read. He’s terrified of AI. I told him: “Guess what? I am, too!”
See, AI holds so much promise if it’s done correctly. It’s already changing the way we work, shop and create, and most of the time for the better. But …
And there’s a big “but” here …
AI is created by humans. And humans are fallible. And some humans are downright awful.
Let’s say you get a call in the middle of the night. It’s someone you care about. They’re in dire straits! They need you to send money right away!
Of course, you send the money. But when you call your loved one the next day, you find out the whole thing was a scam. That was an AI-generated voice, a perfect imitation of your loved one.
Does that sound a whole lot like a sci-fi film? Well, it’s already happening. Cybersecurity firm Check Point Technologies says it has seen a big increase in AI-based scams and attacks from just the last year. This costs Americans about $10 billion a year, according to the FBI. And the number of AI scams is growing.
Now, before you crawl under your desk to hide, be aware that …
AI Has Many Great Benefits
For example, a company called Carbon Robotics has created a machine called Laserweeder. It looks like a big harvester. It goes over a field of crops, using lasers to zap weeds, even ones too small for humans to see.
Doesn’t that sound good? Especially in a day and age when farmers are hard-pressed to find help, especially when it’s the kind of help that will spend all day weeding a field.
And we’ve all heard the stories about AI coming up with new vaccines or solving “unsolvable” problems and more. Heck, a recent report by McKinsey estimates generative AI could add up to $4.4 trillion a year to the global economy. Wow!
But I also hear things that set my Spidey senses tingling, meaning that despite all its great benefits, we have to take …
AI with a Side of Caution
I recently heard about the UN summit where AI-enabled robots told humans bluntly that AI could run the world better than we can.
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That worries me … but not as much as scammers, grifters and plain ol’ crooks.
And by plain ol’ crooks, I mean politicians.
We’re already seeing AI used to make fake video for campaign ads. Very soon, you literally won’t be able to believe your eyes when you watch campaign ads … or the “news.”
In Chicago, the runner-up in the mayoral vote in April complained that a Twitter account masquerading as a news outlet had used A.I. to clone his voice in a way that suggested he condoned police brutality.
That’s one worry. The other is that AI is getting smarter at an exponentially faster rate, as this chart shows …
This means that it’s likely that AI is coming for our jobs sooner than we might have thought. Is your job — or the jobs of your kids and other family members — safe from AI?
I told my lawn guy that I’m not replacing him with a laser-wielding robot anytime soon. But the rest of us might have reason for worry. Here are the jobs that are least- and most-exposed to replacement by AI:
It looks like the janitors will inherit the Earth … if the AI robots don’t take it first.
One thing that could save us is strictly enforcing ethical guidelines for AI. And a lot of smart people in government and business are working on those guidelines right now.
The other thing we can do is adopting the “if we can’t beat ‘em, join ‘em” Outlook. By that I mean …
Investing in the Best AI Companies
We’re already doing that here at Weiss Ratings. If you want to do it on your own, I have a couple of investment ideas for you.
If you want to ride this trend, consider buying the Global X Robotics & Artificial Intelligence ETF (BOTZ). This tracks companies involved in “industrial robotics and automation, non-industrial robots, artificial intelligence and unmanned vehicles.” BOTZ has an expense ratio of 0.69%.
So, it’s not a pure AI play, but it invests in a lot of the big trends I’ve been pounding the table about. It shouldn’t be too surprising that I own BOTZ in my personal portfolio, and it’s doing nicely.
If you’re more of a risk-taker, you can buy what has been the best-performing AI ETF of 2023 so far. I’m talking about the Direxion Daily Robotics, Artificial Intelligence, & Automation Index Bull 2X Shares (UBOT). This fund tracks the same index as BOTZ, but it’s a 2x leveraged fund. So, it’s more volatile, and should be used for only short-term bets on the market. It has an expense ratio of 1.35%.
Here is a year-to-date performance chart of the two funds:
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Wow! You can see both funds are leaving the S&P 500 in the dust. And UBOT is really outperforming.
So, AI is coming. The promise is extraordinary; the threat of misuse is downright scary. But it’s not something we can ignore. And as an investor, you can ride this trend for profits.
All the best,
Sean
P.S. And speaking of AI, on Tuesday, July 11 at 2 p.m. Eastern, we hosted a free Artificial Intelligence Town Hall where we update you on AI and the stock market. Plus, we shared details on our Number One AI Stock for 2023. Click here to watch the replay while it’s still online.
