CONTRIBUTORS
Grant Bowers
Portfolio Manager,
Franklin Equity Group®
United States
Preview
For decades, the idea of computers seemingly becoming sentient and engaging with humans was incorporated in comics, books, television and movies. These computers and animatronic figures played games, controlled spacecraft, and generally sought to ease the lives of those with whom they interacted. These fictional characters were largely based on technology that was developing concurrently with the rise of media. While to many of us they seemed like fanciful characters at the time, we believe these ideas are now entering the mainstream reality of our day-to-day lives, bringing new opportunities for growth and productivity across a wide range of industries.
AI technology has been in development since the 1950s, but it wasn’t until the late 1990s that it started to become more widely used. Early forms of AI in the 2000s focused on business intelligence and machine learning and saw rapid enterprise adoption. Since 2017, AI adoption has more than doubled globally (see Exhibit 1 in the PDF) as companies have embraced the potential that the technology unlocks. The increase in computing power and ability to analyze large data sets and build predictive models has been a tremendous driver of productivity gains not just for the technology sector, but for every industry around the globe.
The next wave of AI appears to be driven by natural language models, like the recently released Generative Pre-Trained Transformer (i.e., ChatGPT). These models combine large amounts of data and computing power to string together words in a meaningful way. They understand words in context and have a vast amount of vocabulary and information. They bring the promise of AI to act as an assistant for many human tasks closer.
WHAT ARE THE RISKS?
All investments involve risks, including possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested.
Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Investments in fast-growing industries like the technology sector (which historically has been volatile) could result in increased price fluctuation, especially over the short term, due to the rapid pace of product change and development and changes in government regulation of companies emphasizing scientific or technological advancement or regulatory approval for new drugs and medical instruments.
The opinions are intended solely to provide insight into how securities are analyzed. The information provided is not a recommendation or individual investment advice for any particular security, strategy, or investment product and is not an indication of the trading intent of any Franklin Templeton managed portfolio. This is not a complete analysis of every material fact regarding any industry, security or investment and should not be viewed as an investment recommendation. This is intended to provide insight into the portfolio selection and research process. Factual statements are taken from sources considered reliable but have not been independently verified for completeness or accuracy.
These opinions may not be relied upon as investment advice or as an offer for any particular security. Any companies and/or case studies referenced herein are used solely for illustrative purposes; any investment may or may not be currently held by any portfolio advised by Franklin Templeton.
Any companies and/or case studies referenced herein are used solely for illustrative purposes; any investment may or may not be currently held by any portfolio advised by Franklin Templeton. The information provided is not a recommendation or individual investment advice for any particular security, strategy, or investment product and is not an indication of the trading intent of any Franklin Templeton managed portfolio.
The information provided is not a recommendation or individual investment advice for any particular security, strategy, or investment product and is not an indication of the trading intent of any Franklin Templeton managed portfolio. Past performance does not guarantee future results.