THE RISE OF MACHINE LEARNING AND ARTIFICIAL INTELLIGENCE (AI)
Analyzing customer preferences is an important example of another innovation reshaping the economy, the spread of AI into various industries. AI relies on powerful computing resources, which are now available to many firms through cloud computing services such as Amazon Web Services and Microsoft’s Azure.
But providing computers with the information needed to make decisions and perform tasks without human intervention—the branch of AI known as machine learning—also requires vast amounts of data. Computers calculate much faster than humans, of course, but they require exponentially more data to make the same inferences. The need for massive data is one reason that the biggest tech companies and internet platforms with the most customers are taking the lead in developing machine learning‑based AI.
Some of the uses of AI may be surprising. Workday is a cloud‑based provider of human resources software. Unlike the static software its competitors install on a company’s servers, Workday’s product is constantly learning, and its experience with millions of employee records means that it can now predict, for example, which workers are in danger of growing dissatisfied with their jobs.
Eiswert notes that there are many ways to play AI for investors. The companies that provide the hardware are a key one, and chipmaker NVIDIA seems exceptionally well positioned. Roughly a decade ago, computer engineers realized that the company’s graphic processing units, originally designed for video gaming, also performed exceptionally well in machine learning. The company has since begun tailoring chips specifically for use in AI and now is a leader in “deep learning” software.