Artificial intelligence (AI) applications are poised to have a transformational effect on the economy. The research firm Technavio forecasts that the global market for AI solutions in all sectors will have a massive compound annual growth rate (CAGR) of 50% through 2021.
What are the options for earning high returns on investments in artificial intelligence companies?
There are few publicly traded companies that specialize in AI. Industry observers such as Reinhardt Krause of Investors Business Daily propose investing in companies such as Nvidia that supply AI processing chips to tech companies engaged in cloud computing. Although Nvidia is certainly benefiting from the growth of AI applications, it also supplies processors for many applications that do not involve AI. We can therefore project at best incremental growth from such companies.
Another option is to invest in big companies that are providing cloud-based AI services, such as Microsoft, Google, or IBM. Such companies are solid blue-chip investments, but they are involved in a variety of products besides AI. Returns from their AI products will thus be diluted by their other business lines.
And, in general, companies do not provide huge ROIs after they go public; the large returns are for those who invested when the companies were still privately owned.
The most promising investment returns in AI belong to emerging companies that specialize in solutions that can transform very large markets in the near future. A very promising sector is AI in Education (AIED). Technavio projects a solid CAGR of 39% through 2020 for AIED solutions, driven by demand for engaging, personalized learning experiences that reduce the burden on live instructors.
Alelo is an AIED company that meets these criteria. It specializes in learning products incorporating AI technology, and it continually captures learner interaction data to generate assessments and improve product performance. And thanks to the FlashFunders platform, accredited investors can purchase preferred shares in Alelo.