The hype around artificial intelligence (AI) this year has propelled the share prices of many related companies to all-time highs, epitomised by the more than +200% increase in Nvidia’s market valuation since January.  The release to the paying public of ChatGPT and other large language models, which exhibit impressive capabilities, is feeding a reassessment of how soon artificial intelligence could revolutionise the global economy.

We are believers in the long-term prospects for this technology to change the world.  There are already clear user cases for language models to support academic research, coding projects, and customer support functions for businesses across myriad industries. 

But the true revolution will come when this technology impacts the daily lives of everyone.  This is true of any major technological upheaval to society and the economy.  The most recent examples have been the internet and then smartphone adoption.  Initially these were technologies limited to small numbers of users, but as the formats of each matured and costs declined, making them accessible to all, adoption skyrocketed.  The internet and smartphones are now, in developed economies and increasingly in developing economies too, part of everyday life for all people.

For AI to change the world to the same extent, it will need to be integrated into the lives of all people, every day.  For this to happen a mature and accessible form factor must become widely adopted by users.  Currently we are not there yet.  To access a large language model today, you would need to log-in to an account or a search engine with an embedded function, and type in requests to the model.  Although a major step change from where we were with AI just 12 months ago, this is still not a mature form factor which will seamlessly merge with the lived experiences of people throughout their day.

Recent announcements from some of the leading technology companies in AI give us a clue as to what mature AI products will look like in the near future.  OpenAI, creators of ChatGPT, have announced the upcoming release of a version of the AI tool which can understand voice commands and respond audibly, removing the need to type commands and read text responses.  Early feedback from test users is impressive. 

Last week Meta, owner of Facebook, Instagram, and WhatsApp, announced it will be launching an augmented reality device that users can wear and which will look like a normal pair of sunglasses or eyeglasses.  The interesting part of the announcement is that Meta plans to embed a version of its own AI into each device, which will allow users when wearing the glasses to interact with their surroundings and directly with the AI.  This is a major step change from the current process of interacting with AI via a chat function in an app, this is true everyday integration of AI with users lived experience. 

The future of AI could be coming much sooner than people realise, and in a form factor you can wear every day. 

As these technologies mature, demand for the infrastructure to facilitate the mass adoption of AI will grow significantly.  From the standpoint of investors, we continue to believe that the best way to play this global structural theme is to own the companies supplying the ‘picks and shovels’, in other words, the suppliers of the infrastructure, products, and services needed to facilitate the AI revolution… a revolution coming soon to a pair of sunglasses near you.

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