After a boom in 2023, artificial intelligence is “just getting started”, according to an AI strategy fund manager.
Jeffrey Lin, manager of M&G’s Global Growth AI Themes fund, said as computing power grows to keep up with technology the area will continue to be a good investment.
He said: “The thing we have learned over the years is that as computing power increases the market increases too.
“AI was one of these applications we’ve wanted to do for a long time but until recently the computers did not have the capacity to do it.”
Lin and co-manager of the fund Thomas Lee joined M&G back in January 2023 to focus on investments in technology and AI.
M&G announced it had launched its global AI themes fund this year.
It is an actively managed fund with a portfolio of between 50 and 70 companies which work on technology needed for AI, offer the solutions to customers, or companies using AI to improve products and services.
Lin added: “While we think there was a big boom last year, I think we are just getting started. We are likely to see self-driving cars before the end of the decade.”
This is something Lee is very familiar with, as a beta tester for Tesla’s self-driving technology.
He said: “It has improved quite drastically in the three years since I have been using it. It was kind of unusable three years ago, I felt like one of the early fools but it has gotten a lot better.
“You can definitely see elements of normal human behaviour in some complex situations now.”
The pair were talking at M&G’s annual investors forum in London last week (January 3).
Sectors which could see a boost from the wider availability of AI are healthcare and utility companies, according to Lee.
He added: “Healthcare is an area that is using AI quite a bit and has vast amounts of data available.
“We think utility companies will need to use AI to match supply and demand for renewable energy.”
Lin and Lee joined M&G from asset manager TCW and have more than 32 and 25 years of investment experience, respectively.
They were also both computer engineers in the early part of their careers.
When the firm’s AI fund was launched at the start of 2024 Fabiana Fedeli, chief investment officer for equities, multi-asset and sustainability said we were at the start of a multi-decade growth theme.
She added: “We see plenty of attractive AI-related investment opportunities, but as with all disruptive market forces, we expect an intense period of industry euphoria.
"Understanding where the strongest growth areas are will be the key to providing better outcomes for clients as they navigate this exciting market opportunity."
tara.o'connor@ft.com
What's your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com
