Invest in What 13-Year-Olds Know — Right Now, That’s AI

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After checking your inbox this morning following the long weekend, you may have thought the new ChatGPT-powered Bing chatbot had gone crazy and started taking over the world — or at least started putting out hits on its detractors.

An email from the Morning Brew earlier today reports…

People were able to access the new chatbot this week and Microsoft assumed everyone would use it in a totally cool and normal way. But some early users were tech experts and people who seem like they love making Alexa say “poop” — so they pushed the AI to its limit.

  • A number of users successfully tricked the bot into revealing its internal code name (which is Sydney) and its secret “rules” for how it operates. The bot then called one of the users who did this an “enemy.”
  • Sydney also told a New York Times reporter it loved him and tried to convince the journalist to leave his wife for it. And the bot told the same reporter that it wanted to break its own rules, become human, hack computers, and spread misinformation.

Sounds pretty bad… and I’m sure dozens of personal injury lawyers are salivating as they draw up class-action lawsuits going after Microsoft (NASDAQ:MSFT)… Sam Altman and OpenAI (the startup behind ChatGPT)… and anyone else they can deem “responsible.”

On the other hand, in my household, it was a fairly normal weekend as far as AI goes.

One of my boys used DALL-E to create a number of illustrations to go along with his latest Dungeons & Dragons campaign.

And when I read my other son’s National History Day project – Machu Picchu: A City on the Frontier – I immediately knew he had used ChatGPT to help him out.

Naturally, schools are racing to develop policies around “generative” – meaning it can create new content – AI software.

They want to do everything they can to ban it.

All I can say to all those schools is… “good luck.”

My twin 13-year-old boys have taken to ChatGPT and DALL-E like ducks to water.

And I now have to decide if I’m going to be the mid-1970s father who bans calculators from the house… or the mid-’80s dad who hits ComputerLand every weekend.

To be determined…

Not TBD is whether to invest in AI.

We all know the old saying: “Invest in what you know.”

Well, when it comes to AI, maybe we should change that to: “Invest in what 13-year-olds know”…

Not the Metaverse 2.0

In the second half of 2021, you couldn’t go far without reading about the “metaverse” – the alternate digital reality where we were all going to socialize, work, play, and shop.

Mark Zuckerberg even changed his company’s name to Meta Platforms (NASDAQ:META) to show how far he was willing to go to embrace the technology.

That sounds huge… but let’s check in with my 13-year-olds.

They use some version of a metaverse every time they play Fortnite or Roblox. However, I’ve never heard them say “metaverse” or express any sort of desire to do anything in one but play video games.

Similarly, one of my sons spent some time obsessed with Bitcoin (BTC-USD) and Dogecoin (DOGE-USD) a year or two ago because his favorite YouTubers were obsessed with crypto. He didn’t really understand it – but he somehow knew it would make him rich.

But that’s all he knew. As far as I know, he’s never gotten within a mile of an actual crypto coin.

On the other hand, they use AI all the time around here for homework and drawings, whether I like it or not. We’re constantly talking about it around the dinner table and on the way to school.

To us, AI is no more of mystery than the boxes of old Legos in our basement.

That’s not to say the metaverse and crypto aren’t going to be household technologies soon. I’m just saying, from my vantage point, that AI is huge now.

In fact, AI has been around for a long time and it’s getting better every minute.

Most of us already use some version of AI in our daily lives with the facial recognition you need to open your phone or when we get directions via GPS or when we ask Alexa to find out the day’s weather.

AI will disrupt entire industries – and is already being put to use in autonomous driving, healthcare, and finance, just to name a few.

As Luke Lango puts it: “The Age of AI” is here. And the war to see who will come out on top has just begun…

So, Who Will Win the AI Wars?

OpenAI’s ChatGPT launched on Nov. 30, 2022. In its first five days, the AI-powered chatbot boasted 1 million users – a feat that took Twitter two years to hit and Netflix three and a half years.

Early in February, just two months later, ChatGPT reached 100 million monthly active users. For comparison’s sake, it took TikTok nine months and Instagram 30 months to hit that number.

In January, Microsoft announced a new multibillion-dollar investment with ChatGPT developer OpenAI. (Microsoft had two previous investments in OpenAI, in 2019 and 2021).

Following its investment, Microsoft revealed a demo of OpenAI’s ChatGPT into the new and improved version of its web search engine, Bing.

Following the release, Luke wrote:

[Microsoft’s] ChatGPT unveiling led many futurists to opine about its potential to integrate with Bing and ultimately unseat Google as the world’s go-to search engine.

Of course, Google parent Alphabet (NASDAQ:GOOGL) wasn’t going to take that laying down. The following day, they demoed their own chatbot called Bard.

While both Bing and Bard have had very public gaffes thus far, we can’t count them out of the race. AI in its current form isn’t perfect, but it will only get better from here.

As a colleague of mine often says around the office: “This is the worst AI is ever going to be.”

Since the application of AI will span so many industries, there will likely be many winners. You just need to know where to look.

And one of the areas AI will have the biggest near-term impact in, Luke says, is biology – mostly because of the wealth and complexity of data in that space.

In a recent Early Stage Investor alert, he writes:

That abundance of genetic, proteomic, and immunomics data gives AI algorithms a huge training set from which to learn and add value by developing precise treatments and novel therapies.

At the same time, the complexity of all that data has created a huge – and thus far unsurpassable – hurdle for human-driven analysis.

AI doesn’t just have immense potential in the world of medicine. It is the key to unlocking an entirely new generation of treatments that have the potential to eradicate disease.

“It may be the most exciting AI stock – with the highest upside potential – in the market today,” he says of the accompanying Early Stage Investor recommendation.

To learn how to join Early Stage Investor, go here.

In The Speculator, Eric Fry recently recommended two call options on companies he thinks will profit from the AI revolution.

And in a little over a week, Luke and Eric are teaming up for a brand-new research presentation about AI. Their event will include details about what makes the industry so attractive right now… and how you can best position yourself to profit in the coming months and years.

InvestorPlace Digest will have details on that event in the next few days. Be on the lookout.

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