Investing in Artificial Intelligence (AI)

As businesses worldwide adopt technology, the innovation of AI may result in market leadership changes, global economic growth, and investor opportunities.

Artificial intelligence (AI) is still developing—along with related regulations and business uses—but it is likely to become ubiquitous. It won't be feasible to avoid exposure. It's not practical to avoid being invested in "the internet" these days with companies across the spectrum of industries embracing online products and services.

AI holds the potential to transform employment, drive faster productivity growth, and drive gains for investors. We'll also discuss the risks prospective investors should consider, as well as encourage them to give listen to Charles Schwab's Managing Director of Legislative and Regulatory Affairs, Michael Townsend's two podcasts on the opportunities and risks of AI with Schwab's Chief Information Security Officer Bashar Abouseido and Managing Director of Trading and Derivatives Randy Frederick.

Transforming employment

AI has the potential for disruption, displacing some jobs and creating new ones as it transforms the global labor force. New technology transforming the labor market is characteristic of our modern economy, and a great example can be seen in China over the past 30 years. In China, agriculture workers made up 60% of the workforce in 1991, but just 24% in 2021, having been replaced by technology (e.g., tractors, harvesters, processing equipment, irrigation, and seed innovations) and people moved to cities to work in factories as manufacturing increased as a portion of the economy. These advances helped improve incomes for workers in new industries in China and even for those workers that remained in agriculture, according to data from China's National Development and Reform Commission.

Tech-driven transformational change in China's labor market