The AI Era: Artificial Intelligence fusing man and machine

by Shaun Cochran / May 22, 2017


CLSA believes that delivering a truly capable artificial intelligence (AI) ecosystem will be the most important invention in human history to-date. While the first five to 10 years will be challenging as diverse and unrelated industries are fundamentally re-shaped, it is our view that AI will restore global productivity growth. We are convinced that a truly capable AI will be mankind’s greatest invention.

Our research shows that AI will create more jobs than it destroys, but the transition will be painful. AI is the science and engineering of making intelligent machines, especially intelligent computer programmes. Leaders have worried about technology taking jobs for centuries. But logic, economic theory and the long arc of history tell us to ignore the luddites’ fallacy (that technology and automation destroy jobs). If we had listened to this, we would all still be farming by hand.

Intelligent machines are inevitable and ultimately the source of future global growth. We are fast approaching a world in which humans and artificial intelligence (AI) are bound together in a constant exchange of information and goals – where people and software will not be much use without the other. And while we opine that AI will restore global productivity, the first 5-10 years will see a challenging transition and turmoil in job markets. Governments will be called upon to ease the pain.

Neural networks have been crucial to advancing AI. We have found that within the field of AI, machine learning has recently asserted itself to be both particularly successful and applicable to real-world improvements, in one specific algorithmic approach to machine learning called neural networks. An example is CLSA’s ‘ADAPTIVE’, our next generation of proprietary trading algorithms using AI neural networks. With its ability to continually adapt in real-time to the market, ADAPTIVE is currently achieving over 95% accuracy in volatile securities, revolutionising algorithmic trading and execution across Asia.

In CLSA’s new and most comprehensive 260-page AI report, The AI Era: Artificial Intelligence fusing man and machine, we consolidate research by 20 top analysts from across CLSA’s global network. The report provides the framework for investors to understand AI in the context of their portfolios, identifying six industries that will see material changes and that investors must track.  We believe autos and healthcare will see the most significant changes, and that robotics, financial services, consumer and technology sectors will also be impacted.

CLSA clients may access the full report via our member website.