The rapid spread of AI may make it impossible to regulate.
Its far-reaching effects will spread to every corner of society.
Investors should exercise both caution and patience as they evaluate the AI opportunity.
Investors are snapping up AI stocks like there's no tomorrow. There's plenty of reason for this optimism: According to most forecasts, AI spending should grow by more than 30% annually for the next decade.
Trillions of dollars in AI spending and rapidly expanding usage will create big opportunities for savvy investors. But the overall impact of AI technologies remains to be seen. According to Motley Fool CEO Tom Gardner, the world could see artificial intelligence push "civilization one direction or another" over the next 36 months. The details of Gardner's predictions should be a cautionary warning to investors everywhere.
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This summer, Gardner sat down for an interview that covered a wide range of topics. One of the most pressing, however, was what would happen with AI technologies over the next three years. Gardner called the AI space "unchecked" and "unregulated." And this is largely true. While many governments and non-profit entities are rushing to adopt proper regulations, innovation is simply occurring faster than regulators can keep up with.
More than 70% of businesses now use generative AI in one form or another, up from just 20% in 2017. Over the next three years, 92% of companies plan to invest more in generative AI technologies. In short, AI is here to stay, and its adoption is gaining steam quickly.
"We may actually be at a point where it is now impossible to regulate AI," Gardner warns. "It may always have been [impossible], by the way, but [...] if you think of AI [...] as a creature, it doesn't want to be regulated. It wants to spread."
The potential inability for AI to be regulated means that, while the ultimate outcome could be considered good or bad, the effects will largely be outside of society's control. "What will happen three years from now, five years, seven years from now, when you're talking to someone and you don't know whether they're human or not?" wonders Gardner. "What will happen when the best surgery you can get by far is by a machine. By far, it's 90% less expensive. What will happen? Bill Gates has predicted that there will not be a need for doctors 10 years from now."
In the interview, Gardner stresses that the impact of AI cannot be overstated. The next few years, he believes, will be highly influential to the long-term trajectory of humanity itself.
"I think right now, [...] looking back on times where big decisions were being made that could move civilization one direction or the other, I think now is probably the most significant other than whether humans would survive on Earth in the very beginning," Gardner reveals. "I think we're at a point in time where it's not clear how to regulate it, how to check it. It's not clear what happens if it moves forward unregulated and unchecked. It's moving that way, and it's going faster than the human mind can prepare for. Exponential growth, we can't process exponential growth, and it's happening every day with AI right now."
Image source: Getty Images.
While Gardner's comments are concerning from a societal viewpoint, they also provide wisdom for AI investors. These technologies remain in their early innings. How the space will ultimately play out remains unknown. Focusing on stocks that can win in any environment, therefore, will be critical.
Consider a company like SoundHound AI (NASDAQ: SOUN). This company offers voice AI technology serving clients in a variety of sectors, from automotive infotainment systems to restaurant drive-thru kiosks. But how big that particular technology will be, and whether or not SoundHound's technology will have lasting power, remains to be seen. A company like Nvidia (NASDAQ: NVDA), on the other hand, produces GPUs that are currently essential to any AI service or application. No matter what particular AI company or platform succeeds, Nvidia will likely be a big beneficiary.
As Gardner correctly points out, the next few years will be critical for AI and humanity, but the ultimate outcomes remain unknowable. Both investors and everyday people should keep this uncertainty in mind.
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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.