A UCLA junior asked Tom whether it’s better to invest in the companies producing AI or the ones that benefit from it. The answer depends on when you ask. Right now there’s a lot of upside in companies implementing AI, because they haven’t fully adjusted their businesses yet. Over time, though, the companies that take AI and create value with it are likely to be the bigger winners.
It’s the same as the 1849 gold rush, when people flocked to California to mine for gold. None of those gold mining businesses are still around. But the ones that sold blue jeans to the miners, handled their money and handled their communications, Wells Fargo among them, are still around today.
Key points
- Companies implementing AI have near-term upside.
- Long term, the bigger winners should be companies that use AI to create value.
- In the gold rush, the suppliers outlasted the miners.
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