Why invest in mega trends?

Mega trends cause very big changes and have a sustainable impact. Companies must not only recognise but also anticipate this trend to keep pace with the future. Thus, for the investors companies that take up on megatrends are an interesting investment. Raiffeisen-MegaTrends-ESG-Aktien enables the participation in the development of these companies.

What is ChatGPT?

ChatGPT was developed by the Californian AI research firm OpenAI, which is and/or was financed by Elon Musk, Peter Thiel, and Microsoft, amongst others. It is a chatbot, a text-based dialogue system for chatting with technical systems, based on an artificial intelligence, i.e. algorithms which understand human speech inputs and can answer in a natural sounding, plausible manner and are constantly learning at the same time. There seems to hardly be anything that ChatGPT cannot do or at least won’t be able to do in the future. What’s behind this innovation and what equities stand to profit from it?

GPT is an abbreviation for “Generative Pre-trained Transformer”, a technology that was originally only intended for translations. OpenAI expanded its use drastically, along with the key innovation that the language model is not trained only for special tasks such as translating or classifying texts, but instead fed with large amounts of generic texts.

Alternative Intelligence already in use in many areas

Netflix and Spotify have already been using AI for quite some time to suggest suitable films or music to their users. Platform operators such as Airbnb and Booking.com are using artificial intelligence to be able to offer dynamic prices. Via its subsidiary Deepmind, which specialises in AI research, Google has been investing USD 1.8 billion annually. Microsoft recently announced a USD 10 billion investment in OpenAI, the developer of ChatGPT.

Will chip manufacturers profit?

Chip producers are profiting handily from this new trend, as massive amounts of computing power and special chips are required. Significant investment in IT infrastructure is necessary if you want to play ball with AI applications. Nvidia, the largest manufacturer of graphics chips, is currently the market leader in this field, with its A100 chip.

Massive growth in AI

The AI business has enormous potential. According to a study by the US consulting firm PwC, by 2030 artificial intelligence applications may contribute around USD 15 trillion to global gross domestic product. Almost every large player in the technology sector has started to integrate artificial intelligence into its products and services or is making large investments in this field. On the one hand, completely new applications and products can be created with it. On the other hand, analysts, scientists, and journalists can work much more productively, as AI instruments can take on a large amount of their workload. At the same time, in the future many traditional human jobs such as analysis, forecasting, and consulting activities may be completely replaced.

Rapid progress

The pace of technological progress in this field is breath-taking. Just recently, OpenAI made ChatGPT-4 available to the public. According to the producer, in testing this improved version exhibited a far lower probability of generating undesired content and had a 40% higher rate of accuracy in relation to facts.

Still some unresolved issues with the technology

However, the technology (still) has some significant problems and weaknesses. For instance, users report that AI applications cite non-existent articles or simply make up sources, answers, and data. In the specialised jargon used by AI developers, this phenomenon is referred to as “hallucination”. Some of the top experts in the field believe that this problem in particular is very serious and will not likely be resolved in the foreseeable future. Accordingly, it will not be possible or advisable to blindly trust the texts or source citations provided by ChatGPT and the like for quite some time.

Artificial Intelligence also involves big risks

At this juncture, it is also important to note that AI technologies also open up possibilities for manipulating and influencing public debates and the democratic process, ranging from customised manipulation campaigns on social media to the fabrication of fake news using artificially generated photos and videos in a completely new dimension.

Is Artificial Intelligence a risky technology?

The use of artificial intelligence with weapons systems is also moving ahead quickly, conjuring up apocalyptic scenarios along the lines of “Skynet” from the “Terminator” series of films. And of course, above all of this is the main concern that has always been associated with artificial intelligence: a self-learning intelligence that cannot be stopped or controlled after a certain point and could lead to the downfall of the human race.

Continuous market monitoring by the fund management

Despite these risks, progress in this field will continue at a rapid pace. Artificial intelligence has great potential to permanently change our society. Betting early on the right companies and technologies can yield good profits on the stock exchanges. That said, in the fast-moving tech sector there is also always the possibility of developments that disrupt the entire playing field. Companies that look to be sure winners can abruptly find themselves down and out. In light of this, continuous, careful monitoring of the market and a good selection of companies by the fund management is essential.

The fund exhibits elevated volatility, meaning that unit prices can move signifciantly higher or lower in short periods of time, and it is not possible to rule out loss of capital.