The Logic Behind AI’s All Time Highs

The Logic Behind AI’s All Time Highs

Summary:To cut down on AI research process times, firms are investing in hardware – like coprocessors and GPUs.AI will help companies cut costs and improve revenues.VC’s don’t expect AI to slow down anytime soon, they are quite excited.Imagine a time when computers start to beat humans at their own games, like world class grandmaster chess players, the best Go players or trivia champions. Well, this actually happened years ago.With the power of artificial intelligence and big data, computers are able to solve complex scenarios like this much faster than humans. Watson and Deep Blue, developed by IBM, or AlphaGo, developed by Alphabet subsidiary DeepMind, were the systems behind these experiments and are likely the most well-known examples of artificial intelligence (AI). While not a small feat at their time, these experiments now represent a fraction of what artificial intelligence can accomplish today.The MacroAI is coming of age, but its roots date back to 1666 when Gottfried Leibniz (a German philosopher, mathematician, and all around Renaissance man) theorized that all ideas are basically a combination of a small amount of concepts.¹ Similar to how humans and computers can recognize numbers. The number “8” for example is comprised of two little o’s stacked on top of each other vertically or how all of physical life is made up of the relatively small amount of elements in the periodic table. Breaking things down into its components, that being physical objects or numbers, is what Leibniz essentially theorized and how data scientists actually view and solve problems today.This is relevant to AI because neural networks (one of the many AI research techniques) break...
Transportation is Evolving

Transportation is Evolving

Summary:Macro trends signal a slowing picture for the automotive sector, from inventory-to-sales to production.To fight the challenging macro, Detroit and others are doubling down on innovation in autonomous and alternative energy.Investors can expect early adopters to step in as early as 2020.The number of autonomous vehicle testing permits in California alone has increased 4X since September of 2015. Back then, only 9 firms had permits from the California Department of Motor Vehicles. Permit holders today include the major players; Apple, Google, Ford and many more. From indicators like this, our opinion is the automotive industry is pivoting.1The electronic vehicle (EV) marketplace has also experienced substantial growth. Plug-in vehicle market share in the United States grew 37% in H1 2017 vs H1 2016. The absolute market share is still minimal (1.1% in H1 2017), but just like the aforementioned trend in autonomous driving, the growth is undeniable.2The traditional automotive market is being disrupted by a technological revolution. The bulk of this attack is being driven by the world’s largest tech and auto companies. The ultimate goal is to make roads safer, more efficient, decrease barriers to entry (both from a user and technological point of view) and spur growth in the automotive industry. As such, your commute to work will likely drastically change in the coming years.The Macro Auto Picture From a high level, the automotive sector has beaten the market year-to-date (YTD).  A well-diversified automotive ETF (CARZ by First Trust) is up 19.5% while the S&P 500 is up 12.97% YTD. Last year, autos in aggregate had largely underperformed, down -4.6% when the market was positive 10%. Prior to...