How to invest in AI?
October 31, 2014 11:26 PM   Subscribe

Any recommendations for (public or private) companies heavily engaged in artificial intelligence products and research?

Looks like the Cambrian explosion of Artificial intelligence (with the possibility of a singularity event) is coming.

How to invest in it? How to make some diversified long term bets?



Any suggestions?
posted by yoyo_nyc to Work & Money (5 answers total) 3 users marked this as a favorite
I would find promising students and invest in their education, receiving a share of their future income in return. Follow what graduate students at universities are doing, in general.

If you're an accredited investor, search for companies in the AI category that haven't received much funding yet. Also, attend "demo days" of startup accelerators and AI conferences.

Google, IBM, Amazon, Microsoft, etc. are mature, diversified companies unlikely to significantly increase their stock price by developing artificial intelligence because they need to outpace the decline of their other businesses.
posted by michaelh at 7:59 AM on November 1, 2014 [2 favorites]

Are you looking to buy a few shares of stock or do you have the resources to be a venture capitalist? If the latter, well, hire a couple phd's onto your research staff. For stock perhaps look to companies like roomba or the car companies that are starting to offer restricted self-driving cars.

But with the track record of AI, as a specific investment, any specific company is right up there with lottery speculation. ;-)

Read singularityhub , it reviews a lot of startups. Also Ray Kurzweil is involved with possible small companies.
posted by sammyo at 12:06 PM on November 1, 2014

Imagine it's January 1, 2007. You know -- know -- that the Cambrian explosion of mobile devices is about to happen, and you have $1000 to invest. So you split your money 6 ways in the 6 big companies you know have a stake in it: Google, Apple (somehow you know about the iPhone ahead of time), Microsoft, Nokia, Motorola, and Blackberry.

By my calculation your investment would be at $2200 today, thanks mostly to Apple's insane rise (Google did OK, Motorola and Microsoft are about the same, Nokia and Blackberry obviously are huge losers). Overall that sounds great. But if you had invested in the market as a whole, you'd be at 1800 anyway. Not a lot of reward for taking a huge risk.

Even when there's a "Cambrian explosion" it's not obvious how to make a lot of money, except in hindsight.
posted by miyabo at 4:20 PM on November 1, 2014 [1 favorite]

Back in 89-91, I thought to myself, "this online thing is going to be big, how can I invest in it?" I didn't think I could pick one winner, but I figured I could invest in portfolio, of players, which were, at the time, I think, CompuServ, Prodigy and AOL (or its predecessor), and that even if most of them failed, one of them would do really well. I was a student at the time at a pretty intense college, so I didn't have much time or money to pursue brilliant insight further, and I didn't invest in anything.

The exact details of the investment targets I identified aren't that important. The important things are that:
1) Even then, I'm not sure that the players I identified had relatively pure-play investment vehicles for the average small investor. I think at least a few were subsidiaries of larger more diversified companies.
2) If they had, I still wouldn't have made much money because my timing and focus were a little off.
3) I didn't even consider what was, in retrospect, one of the major beneficiary of the online explosion in that era: Cisco, which IPOed in the spring of 1990.

I did manage to make some money off my early interest in things online and internet though. I invested in Netscape shortly after its IPO and sold it at a decent profit. But the most many came when I decided to make a career change from life sciences in the early 1990s, and finally found a job because of what I'd learned about the Internet after graduating.

Since then, I've invested based other similarly profound insights. One of those did well enough, for (some of) the reasons I thought it would, to absolve my other investing sins and provide a nice return. I know enough to know though that I was a little smart, a roughly equal measure of stupid, and very lucky.

The way you asked your question makes you sound about as naive as I was in 1990. If you want to try "investing in AI" then by all means, do so. Make a good contribution to your retirement fund, and then if you have some money left, put it aside and start figuring out all the ways you can invest in AI. Once you've invested, keep on paying attention. Oh, and what you are actually investing in, it isn't AI, its your own self-education. The money is just something to focus and keep your attention.
posted by Good Brain at 5:22 PM on November 1, 2014

I love everyone's advice. To further your research, I recommend you check out Motif Investing to see what others think/do. Not sure if there's anything specific to AI, but it's worth reviewing.
posted by doctordrey at 4:08 PM on November 3, 2014

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