Investors are Turning to AI-based Companies in Various Industries
Artificial intelligence (AI) has been the talk of the town for the past year, and investors are now looking beyond foundational technologies like ChatGPT to identify how companies in other industries could benefit from applying the concept.
Second Annual Forbes Iconoclast Summit
Dozens of influential investors and business leaders gathered at Pier 60 in Manhattan for the second annual Forbes Iconoclast Summit on June 12. They discussed how they’re adjusting their portfolios and steering their companies and clients through the tumultuous period in global finance. Nearly every panelist, including Goldman Sachs CEO David Solomon and billionaire Ray Dalio, shared thoughts on large language models and generative artificial intelligence.
Why is AI so important?
“The ideas behind AI are not new. They have gone through multiple cycles of raised expectations and disappointments. But this time around, I think this cycle is real because, finally, the power of computers has reached a point that pushed AI beyond the threshold of what was considered possible,” said Amir Salek, senior managing director at Cerberus Capital Management, speaking at the technology-focused panel titled “Rewiring The World: Is AI the Answer?”
Julian Salisbury, chief investment officer at Goldman Sachs Asset and Wealth Management, said, “Artificial intelligence presents a ‘confluence of performance improvements’ that come through the relatively rapidly upgraded capability; accessibility—unlike some other technologies that are somewhat esoteric—and awareness, in particular with social media. I think there will be some bumps along the road, but it’s absolutely changing how businesses operate and it’s absolutely changing what we invest in.”
Investing in AI
Instead of only investing in AI-based companies and their suppliers, some investors are looking for businesses in other sectors that use AI-based concepts to supercharge their results. Salisbury added, “Right now we are spending less time on those large capital-intensive endeavors like the semiconductor market. We are focused on finding companies that can leverage the application of these technologies in industries like healthcare and education to do things in a much more capital-efficient way. It’s not just about finding the AI company.”
Exploring Opportunities in Emerging Markets
Sometimes, the best prospects are in the most underserved places. “What we’re seeing in the rest of the world is the application of AI en masse. How do you increase yield for food security in Africa? How do you then take the applications of AI into a part of the world where there’s no credit scoring systems and lots of micro financing to change the way that local populations are able to access finance?” echoed Noor Sweid, founder and managing partner of Global Ventures, a Dubai-based venture capital firm. “The leapfrogging is easier for emerging markets because there is no infrastructure and legacy that you’re trying to replace in some way,” she added.
The Future of AI
Although panelists were not throwing caution to the wind, Salisbury predicted the growth of artificial intelligence “will not be a straight rise up.” He said there will “be a lot of value created and destroyed” and “there is going to be a division between companies and people that embrace and understand this technology and those that choose to ignore it.”