There are probably only a few ways you can invest in AI…
• Venture Capital
My instinct tells me that venture capital is probably the best bet for investing in AI. The main issue for typical investors is having the cash. There aren’t many crowdsourced venture funds, or funds open for retail investors. If you can’t cough up the cash, you are probably won’t be able to compete.
Venture capital as an industry is structured to pump companies with mountains of dough and then cash in with a mega-IPO. This is in contrast to the corporate America of times gone by, when a company like Walmart could IPO in 1970s at something like $.07 dollar per share.
• AI ETFs
my instinct always tells me to stay away from ETFs. While ETFs are tracker funds, they are far more dangerous instruments than index funds. They are derivatives with complex contracts that I don’t understand and to be honest am afraid of…
Another thing to note with ETFs is that you will be investing in a basket of companies - not one or two. With this in mind, you are very unlikely to fund a lottery ticket ETF it will be focused on many companies, not just the heavy hitters.
• Individual Stocks
This leaves AI focused stocks. There are some pretty monstrous companies investing heavily in AI. Alibaba recently announced a $15 billion investment in AI, machine learning, big data and quantum computing. If you buy a company like Alibaba, don’t expect 15%+ returns each year. Big tech are becoming impossibly large, meaning that even the largest gains are only going to move the dial.
So, to go over what I just wrote:
Venture capital is where the lottery tickets are going to be. If you don’t have $2m+ - forget it. If you can find a crowdsourced fund investing in interesting companies - email me!
ETF - I would stay very clear of all ETFs.
Individual stocks - probably the safest bet, although you are very unlikely to find any big winners…