By David Harrison, Rathbone Greenbank Global Sustainability Fund Manager
We’ve all heard the potential pitfalls of Artificial Intelligence (AI). Since the breakthrough in the latest vintage of generative technology AI, there have been countless stories and warnings about the risks from privacy, discrimination and copyright right through to people’s jobs and the very fabric of truth online.
These are fair concerns which need to be addressed squarely and honestly by both developers and users of AI. Yet new technologies with the chance of altering how we live and work in fundamental ways often create these conversations. Arguably, we’re still discussing these issues and – lawmakers are still writing rules about them – for the internet, which has been knocking round the public for 30-odd years now. But imagine if we had written off the internet back in the 1990s because of such worries. For one, you’re probably reading this online, so you wouldn’t be doing that. We wouldn’t have smartphones, with all the time and costs they save us with innumerable tasks. The internet has grown into the greatest repository of human knowledge since the Great Library of Alexandria. And the greatest repository of cat videos, I’ll give you that. But that’s nice to have too.
In short, without the internet we would probably be queuing in a bank branch somewhere, checking our watches (for the time, not alerts), before hustling back to the office to do some more paper-based filing. We would be getting through much less work in many more hours. We would have less money and less time.
The internet is so embedded in our lives that its benefits are too wide-ranging to fathom, let alone list. AI has the potential to have a similar effect. And like the internet, I believe it will spread slowly at first and then exponentially throughout society and commerce. The internet age was about amassing a phenomenal amount of data; AI will be able to harness that information and use it in ways that would be impossible for people.
Some companies are making money from supplying the ‘picks and shovels’ for the AI revolution: computing power. Some, like Microsoft (which we own) sell cloud computing that enables the use of massive amounts of computing power, which is how you can run a cloud-based AI from a smartphone in the middle of the street. This is much more efficient than all of us needing a supercomputer, which would require a phenomenal amount of natural resources. Then there’s ASML, the Dutch company that designs and builds the precision laser computer chip printers that can imprint 80 billion transistors on a computer chip roughly half the size of a MacBook Pro. When eight of these chips are combined into a server, they deliver 4,000 teraflops of computing power, the equivalent of 400 PlayStation 5s. We hold ASML as well.
Some of our companies are already making use of AI directly. Take Relx, whose share price was hit hard at the first reveal of the blockbuster AIs. The business had been researching and investing in AI for some time on its own because of the benefits and changes it sees in areas like science and law. AI could massively reduce hours spent on research, but – like with any model – the quality of the results is heavily reliant on the quality of the data that goes in. The viral story of the American lawyer who used ChatGPT to write a brief only to find that it relied on non-existent cases is a pertinent example. Relx owns the verified info that needs to go into any AI service for it to be of real use. Relx’s share price has more than recovered from that initial sell reflex, showing how undecided investors are about how AI will play out.
There’s a lot of hype out there and it will no doubt pay to avoid it where possible. But I think the benefits of AI will flow to all businesses across all industries. This will take time as people adapt and learn how best to use the new tools that are still being developed. Some individual businesses could be destroyed by AI, if new tools make them obsolete – like the horse carriages of old that were usurped by powered transport, or the video stores that were obliterated by online streaming. But I believe the technology should help businesses cut costs, improve their products and services and make life easier for all of us.
