ARTIFICIAL INTELLIGENCE (AI) HAS RIDDEN WAVES of public excitement, skepticism and fear since the 1950s.1 The skeptics, it seems, may soon be silenced. When ChatGPT – a language-processing chatbot capable of synthesizing reams of information and generating human-like text in response to queries — became widely available to consumers for the first time in late 2022, it was immediately apparent that a tipping point had been reached.
Just ask ChatGPT. Here’s the response we got – within seconds – when we questioned whether all the hype around artificial intelligence is justified: AI “holds immense potential to drive innovation, improve decision-making processes and tackle complex problems across various fields, positively impacting society.” Clearly, modesty isn’t one of the bot’s “character” traits.
Human observers agree. “AI is going to transform the global economy as surely as electricity and the steam engine did in their own times,” says Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank. Below, Hyzy and Haim Israel, head of Thematic Investing for BofA Global Research, discuss the economic and market implications of the coming AI revolution.
Why is this finally AI’s breakthrough moment?
Put simply, it’s the perfect marriage of technology and need. “More data is created in a single hour today than in an entire year two decades ago. Yet only about 1% of data is being captured, used and stored,” says Israel. “Until now, AI could read and write, but not understand content. That’s rapidly changing,” he explains. The onset of generative AI (GAI) systems such as ChatGPT enables machines to understand human language and produce human-like dialogue and content.