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If you’re an investor in the stock market, you may know a thing or two about AI already. For every $4 spent in the US, $1 has been invested into AI projects according to the most recent data on the topic – that equates to over $24 billion in a single year, which is a lot of pocket money, even for the most prolific investors! Buzzwords are common from the on-the-ground, concept-driving Silicon Valley whizzes to the angel investors standing on the 73rd floor of a high-rise in New York. AI is not just an abstract, sci-fi fantasy, now – there are tangible dollar dills slapped to the forehead of the face of artificial intelligence
But if we’re to look at the technology realistically, any sensible investor would still equate it to a “risky” investment. AI still possesses a huge amount of untapped potential, and only time can tell exactly what lays on the horizon.
Investors are literally changing the game when it comes to AI investing; it’s created shakes the world over, and not just from those whose knees are quaking over the idea that AI is here to replace them. However, it remains to be seen if it will become the next big thing and entirely revolutionise investing.
Nevertheless, a lot of us are itching to get some skin in the game.
While investors are spending billions on supporting AI across multiple industries, they are doing so in a sector that may have already started itself down the road of a revolution. With this in mind, let’s look at five reasons AI might revolutionize investment and what this means for the future.
Using Big Data To Make Big Decisions
One of the most significant ways AI is making an impact is through AI-driven investing – using AI to analyse big data, analyse and curate it, and then turn that knowledge into insights for investors to manage their portfolios. Just as ChatGTP can write an essay with a single prompt, AI investment tech can answer questions from investors with educated market insights, derived from a huge amount of data.
Reducing Investment Risk
Taking risks plays a big part in the stock market, but not every investor knows how to assess risks, or even has the financial capabilities to take them. With the power of AI, however, investors can make more informed decisions and leverage an AI engine’s analytical tools to take the risk out of them. This is also done alongside real-time information and algorithm-based predictions on future prices.
Cutting Out The Middle-Men
The problem with the investment scene right now is that a large portion of it is reserved for those with more financial properties to invest in. This is then bolstered by professional middlemen who will not only opt for clients with larger sums but can easily make decisions that maximise their own gains. With AI, however, there can be no need for a middle-man to navigate the market. It is all done by the tech for the investor, and with more reliability and accessibility, too.
Supporting Sustainability And Responsibility
With everyone growing more ecologically oriented, AI can offer more ways to invest in companies carrying out sustainable and socially responsible practices. They can do this by analysing a large amount of data to positively identify these companies – ones that are meeting ESG criteria – and monitor their performance alongside these goals.
It’s Already Happening
The last reason that AI could revolutionize investment is because it’s already happening! Right now, there are AI-based engines that are supporting investors with their portfolios and offering them a way to get into the market and make returns. With AI ranking systems outperforming the S&P 500, this is a revolution that is finding its feet in 2023 but is sure to fly over the next few years.