Happy New Year! Get ready for another volatile year. It has now become common that market moving information is broadcasted instantaneous through social media. Reality TV is being played out from the White House. The White House will become a virtual office with locations in New York, Washington, and Florida.
Self-driving cars, virtual reality, automation, and IBM’s Watson are at the cutting edge of technology. My top investment opportunity for 2017 is artificial intelligence (AI). AL could be as disruptive as the internet was 20 years ago. All the major technology companies are working to advance AI. The first mover advantage goes to Apple, Microsoft, IBM, Google, Amazon, Netflix, Nvidia, Tesla, and Facebook. There are more than 140 other private companies hoping to be acquired by these leaders.
The most popular Christmas gifts in 2016 leveraged AI. Amazon’s Alexa and Apple’s Siri assistant are only at the beginning stages of AI. If you are an active user on Facebook, it probably knows more about you than your own family. It stores all your browsing history and builds a profile about your personal life. The accuracy of this data would shock you. According to a recent article in Fortune, “they are building an internal platform to harness artificial intelligence so it can deliver exactly the content you want to see.” The direction of this country is forever changed by social media. If you want to know a valid reason why Donald Trump upset Hillary Clinton, read this story on how Trump’s campaign leveraged Facebook.
President Trump’s challenge over the next 4 years will be how to prevent Silicon Valley from automating the workforce and slowing AI. There will be more jobs lost to AI than by Mexico or China. AI machines will eventually surpass human performance. If you want your child or grandchild to graduate with a comfortable six figure job, give them the advice that building app’s and software development are the hottest industries.
On Thursday, Macy’s announced 10,000 job cuts and a reduction of 68 stores. The success of Amazon and other online retailers is not slowing. Advances in AI will make consumers even more dependent on technology. President Trump has taken credit over Twitter for having saved a few hundred factory jobs, but he has no power to stop the ongoing disruption that technology is creating in every corner of the economy.
The investments that I continue to avoid are those that are losing market share to AI and workflow automation. For those businesses that fail to adapt to AI, they will likely suffer the same fate as Macy’s. Over the coming years, there will be many rewarding investment opportunities in innovative companies that are harnessing the power of AI.
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