Many readers asked, ‘There must be interesting areas in AI,’ and ‘What do you think they are?’ – I still don’t think it is wise to invest in specific AI companies as an individual investor (and stick to low-cost, widely-diversified ETFs), but if you want to hear where I think are still some opportunities, here you go!
AI’s Evolution and Potential:
- Historical Comparison: AI’s current trajectory can be compared to past technological revolutions, like the Internet and computing, where the marginal cost of critical processes dropped to zero. AI enters a similar super cycle, particularly in language, reasoning, and creation.
- Early Stages: Despite the rapid advancements, we are still in the early stages of AI development, with decades of growth ahead.
Current AI Landscape:
- Big Players: Major companies like Google, OpenAI, and Anthropic lead the charge with large models, ensuring stability and strategic value.
- Smaller Models: There are also successful smaller models focusing on specific tasks like speech, music, and images.
Interesting Use Cases:
- Creative Composition: AI is revolutionising creative fields, enabling the creation of complex assets for industries like gaming at a fraction of the traditional cost.
- Companionship: AI is making strides in emotional interaction with applications like Character. AI is becoming part of social interactions, especially among younger users.
- Coding: Tools like Cursor are enhancing programming capabilities, making sophisticated coding accessible to both experts and novices.
AI and Creativity:
- Enhancing Artists: AI tools are not replacing artists but enhancing their capabilities. The quality of AI-generated content often depends on the user’s artistic background.
Challenges and Future Directions:
- Compute vs. Algorithms: Casado references “The Bitter Lesson,” highlighting the debate between developing more intelligent algorithms versus leveraging more computational power. The past has proven utilizing more computing often yields better results.
