Chris Ford, co-manager of Sanlam Global Artificial Intelligence, explains to Sunniva Kolostyak at Morningstar UK, how much of an impact artificial intelligence (AI) will have on our lives and how he is investing in the trend.
Below is an excerpt from the interview which you can watch here.
The Disruption
If you would have told me what had been achieved over the course of the last five years from the perspective of five years ago, I wouldn’t have believed it. It's been truly extraordinary. AI is going to be, in our view, the defining technological context within which we're going to live our lives, both at work and at home over the course of the next decade. As a society and as investors, we need to engage with it wholeheartedly in order to understand where the disruption is going to occur and how that disruption will change the way our lives are led, across the world, in all sectors of the economy, and in all regions.
The Adoption
The adoption rates are very, very, quick. One of the features of the AI world that's caught the eye has been the GPT technology from OpenAI and specifically the ChatGPT application which many people would have been playing with over the course of the last few weeks. And that got from nothing to 100 million users in a matter of weeks and far, far quicker than other applications. It took WhatsApp 50 months to get from nothing to 100 million users. It took Instagram two and a half years to get from nothing to 100 million users. And ChatGPT did it in four to eight weeks depending on which source you want to look at.
The adoption is incredibly high. The willingness to engage with the technology is incredibly high.
ChatGPT is an important moment in the story of AI, because it's that moment where you have such a powerful application in the zeitgeist and usable by all of us. Many people have engaged with it. We've used it for silly things like writing sonnets and poems, we might have used it for more meaningful things, completing assessments at school or writing reports at work. So it's really the first time that explicitly people have had the opportunity to engage with a leading-edge AI platform.
The Future
It's a bit like opening Pandora's box. Once you open Pandora's box, it doesn't go back in again. So now it's here to stay, and we need to figure out how we govern it, how we regulate it, and how it's going to be embedded successfully to the benefit of society rather than to its detriment.
The Investment Thesis
At the point that we can really, honestly say that AI is ubiquitous, I kind of feel slightly we've won. And that's a point that we've been making since we launched the Sanlam Global Artificial Intelligence in 2017, that at some point in the forthcoming decades, AI is going to be everywhere and no company is going to be able to succeed without having AI systems embedded in their business processes.
But we're an awful long way away from that.
So while things like ChatGPT catch the eye at the leading edge, actually, there are many more prosaic examples of AI systems, such as robotic process automation tools, for example, which have a huge amount to offer in the corporate context, in particular. Which really have barely begun to scratch the surface in terms of their deployment in our daily work lives.
I wouldn't say it's straightforward, but the ability to differentiate very clearly between those companies engaged fairly meaningfully with AI and those that are not meaningfully engaged with AI is very apparent and we have a very clearly defined framework for doing that.
The Investable Universe
Our investable universe is going to get bigger and broader and deeper and better over time. But for a portfolio manager, that's just fantastic, because all that does is just keep the bar going upwards in terms of raising that bar, the bar over which companies have to jump in order to be able to be considered for inclusion within the portfolio. So that's a wonderful thing for a portfolio manager to have as a feature of the investable universe which we operate within.
One of the features of our investable universe is that there is a lot of tech, but then there's also a lot of stuff which sits well outside of the technology sector. The opportunity for us to find those great AI exposures in disparate parts of the economy and in disparate parts of the world allows us to build a diverse, robust, and persistently performing portfolio. And so far we think we've managed to achieve that reasonably well. But to the extent that our investable universe does grow and broaden over time, we think that those characteristics hopefully should strengthen over time.
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