If you’ve been following the stock market over the past couple of years, you’ve probably noticed that artificial intelligence (AI) has become one of the hottest topics in investing.
Nearly every earnings call now mentions AI. Technology companies such as Microsoft (NASDAQ: MSFT) and Alphabet (the parent of Google) (NASDAQ: GOOGL) are spending hundreds of billions of dollars building AI infrastructure, while businesses across almost every industry are looking for ways to incorporate AI into their products and services. Yet despite all the attention, many people still aren’t sure what AI actually is or why it has become so important.
That investment involves far more than the AI software most of us interact with. It spans chips, memory, networking equipment, data centres, electricity, cloud computing, and the software and applications that turn AI into something businesses and consumers can use.
Before we can understand why companies are investing so heavily in AI, it helps to first understand what AI is – and what it isn’t.