The Bid 201: AI's Three Investing Phases
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Nov 29, 2024 Nicholas Fawcett, a senior economist at BlackRock Investment Institute and an expert in AI's economic impact, shares insights on how AI is reshaping industries and economies. He discusses the three phases of AI's evolution: build-out, adoption, and transformation. The conversation highlights the capital investment rush led by companies like NVIDIA, the potential for AI to boost productivity and create new jobs, and strategies for investors to navigate this rapidly changing landscape while seizing emerging opportunities.
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AI's Transformative Potential
- AI models aim to embody and amplify human intelligence, setting them apart from past ICT booms.
- AI is a general-purpose technology with transformative potential, similar to steam power or electricity.
AI's Three Phases (BAT)
- BlackRock Investment Institute's "BAT" framework analyzes AI's evolution through three phases: build out, adoption, and transformation.
- The framework helps investors understand the opportunities and changes across these stages, even amidst uncertainty.
Investing in the Build-Out Phase
- The build-out phase has favored companies like NVIDIA, driving market performance and optimism.
- Investors should consider that there's still potential for growth in these companies.