How Robotics and Artificial Intelligence are shaping our future
The megatrend transforming our world
Marketing Communication
When ChatGPT4 launched at the start of 2023, even its creators could not have foreseen its rapid adoption. Journalists, academics and creatives quaked as the app gathered one hundred million users in the first two months from its launch1. Artificial intelligence (AI) moved from being a Hollywood thought experiment to, potentially, creating as profound a change as the internet.
In reality, artificial intelligence had already been creeping into people’s lives. Amazon’s Alexa or Google’s Home have been a feature of domestic life for several years. However, ChatGPT4 showed that robotics and artificial intelligence could be a vast, society-shifting trend, capable of solving some of the world’s most significant problems, but also creating profound disruption to existing work and living patterns.
So what is artificial intelligence?
AI is any technique that enables computers to complete tasks that typically require human intelligence. In ChatGPT4’s case, the language model can answer questions and help with the composition of emails, essays, or code, but the uses of AI also extend to autonomous driving, interpretation of data and fraud prevention. In each case, machines analyse vast amounts of data to find solutions to problems. Robotics are part of the same complex. Chatbots, humanoid robots, or machines that are trained on data to perform certain tasks.
AI has been able to take off in recent years because of advances in computing power, which allow the collection of more and more data. By 2025, the amount of data generated each day will reach 463 exabytes (EB) globally (one exabyte is 1,000 bytes to the sixth power2). All the words ever spoken by humans would fit into just five exabytes. There have also been changes to Google architecture that means it can contextualise whole questions as opposed to words or phrases in isolation. This has enabled AI to solve increasingly complex problems and improved the results.
Trends supporting growth in AI and robotics
Those complex problems could extend to some of the most intractable issues facing the world today. Ageing populations are creating a demographic time bomb: the share of the population aged 60 years and over will increase from 1 billion in 2020 to 2.1 billion by 2050. This takes vast swathes of people out of the workforce, while also increasing the need for care. AI can help solve labour shortages by automating manual and repetitive tasks, while robots are increasingly used to help with elderly care. This is already happening in countries such as Japan.
AI can also be part of the solution to the climate crisis, promoting efficient energy use and distribution. It also has multiple uses in agriculture, with farmers using specialist sensors and machine learning to improve efficiency, generate higher yields and reduce costs. Farmers are using robotics solutions for autonomous machines in agriculture, for more efficient path planning to optimise tasks such as spraying or seeding. They are also applying AI-based soil monitoring systems to obtain real-time insights on the health of their crops. This is part and parcel of feeding a growing global population.
At the same time, there are multiple applications for AI in healthcare where it is already being used in drug testing, cancer screening, and in creating targeted treatments.
More generally, robotics and AI are seen as playing a key role in business efficiency and digitisation. It has the power to leverage human productivity and build economic growth. This is particularly evident in the manufacturing sector, which is adopting automation and robotics to enhance efficiency and lower expenses. The industrial automation market was valued at USD133.4bn in 2020, and projected to reach USD 274.4bn by 20303. These efficiencies come from the use of robots in assembly lines as well as self-driving vehicles that transfer materials and goods throughout factories.
It is worth saying that these efficiencies may come with a cost. The European Parliament estimates AI in the workplace can result in the elimination of certain jobs: 14% of jobs in the Organisation for Economic Co-operation and Development (OECD) countries are highly automatable and 32% can undergo substantial transformation4. In addition, approximately 7% of American workers are at risk of being replaced by generative AI with administration, legal and engineering jobs particularly vulnerable5. This could be a long-term problem for policymakers.
Investing in AI and robotics
AI and robotics investment tends to focus on two key areas:
The first is around companies involved in the creation of AI and robotics. These may be companies operating in the “compute layer”, which provides the power and storage capacity to train and run AI models, such as cloud providers or chip units for the mobile computing and automotive markets.
The second potential area of opportunity lies with companies that are making use of AI and robotics to deliver better services, or create their products more efficiently. There may also be an opportunity with the application of AI and robotics at a later stage, relating to the interface between users and the underlying technology.
Robotics and AI are multi-generational, disruptive trends. The impact for businesses and individuals could be revolutionary.
Thematic ETFs can provide investors with convenient exposure to companies involved in specific niches or themes, which may offer long-term growth potential.
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1 https://www.reuters.com/technology/chatgpt-sets-record-fastest-growing-user-base-analyst-note-2023-02-01/2 https://seedscientific.com/how-much-data-is-created-every-day/3 https://www.msci.com/documents/1296102/34913408/Robots+Automation+%26+AI+-+Thematic+Insight.pdf4 European Parliament: https://www.europarl.europa.eu/news/en/headlines/society/20200918STO87404/artificial-intelligence-threats-and-opportunities5 https://www.msci.com/documents/1296102/38892663/MSCI_Impact_Robotics-and-Ai-Impact-%231_Part-1_Jun12.pdf/
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