AI Investing… Or Investing in AI

Our blog talks a lot about using artificial intelligence — or, AI — as a tool for investing and trading.

Trading firms and hedge funds are using AI every single minute of every single trading day to place investments and make trades. Billions and billions of dollars — not to sound too Carl Sagany — are riding on how well AI or machine learning trading schemes work.

We’re also seeing artificial intelligence revolutionize other industries. Pick up an iPhone and ask Siri about AI. She might lead you to several stories on the web about how AI is being used in everything from telecommunications to health care.

But, the perception among many is that we are still stranded in the depths of AI winter — that’s the term for the years of little progress in artificial intelligence. Some experts are saying that this is a misperception. AI has made huge gains in the last few decades, but when compared to the expectations, this progress seems minuscule.

If the perception is that AI is hopeless — and the reality is that AI developers are making great strides in creating artificial intelligence- and machine learning-based products, then wouldn’t placing bets in AI companies add up to a possibly lucrative, albeit contrarian investment idea?

One contributor to Seeking Alpha is seeing AI as a possible investment play.

Over the past few years, we have seen forms of artificial intelligence begin to quietly creep into our everyday lives and become something on which we depend. A very simple form would be something like Microsoft Corporation’s (MSFT) spelling and grammar check in its Word software or the method that Facebook, Inc. (FB) uses to suggest people that you might know.

Seeking Alpha writer, Matt Cilderman, has a few recommendations.

One is an oldie, but a goodie — and will possibly be a biggie. IBM — the brains behind Jeopardy-winning Watson — is in the forefront of AI research and development. (Don’t forget that HAL in 2001: A Space Odyssey is a take-off of the IMB acronym.)

Another interesting pick in the article is Nuance Communications (NUAN). According to the article:

Nuance is also well-known for its “Dragon” series of “apps” for translation, etc. However, even with some of the recent, high-profile breakthroughs in translation, it will be a while before we will see this technology used to create a type of universal translator that has been part of science fiction lore for quite a while now.

Nuance has been growing fast — but it’s also taking on debt, Cilderman points out, so buyer beware.

Although it’s private right now, Narrative Science is creating programs that takes data and creates news. It’s another one to keep your eye on.