The Artificial Revolution: How to Invest in ChatGPT and AI8-min read

ChatGPT: The AI Arms Race Begins

In November 2022, OpenAI made history with the launch of its new chatbot product, ChatGPT. This revolutionary AI system set off an arms race among Big Tech firms, with everyone vying to mirror and build upon its capabilities. The potential of AI is immense, and ChatGPT’s success has shown that there is still much untapped potential in the field. Artificial intelligence (AI) technology has been around for quite some time, although only in a relatively primitive, unpolished form. However, in recent decades, it has been improving exponentially, and an ever-expanding list of use-cases is becoming more apparent.

For investors, the growth of AI represents a once-in-a-lifetime opportunity to invest in cutting-edge and unproven technology. While there are certainly risks involved, the potential rewards for those willing to take a chance can be enormous. With the right guidance, Indian investors can capitalize on the still-developing field of AI, identify promising investment opportunities, and gain a better understanding of the technology and its implications.

This guide is designed to help Indian users navigate the complex world of AI investment. We will explore the significance of AI, its potential impact on various industries, and the key factors driving its growth. We’ll also provide practical tips for investors, highlighting the most promising AI investment opportunities and outlining strategies for managing risk. By the end of this guide, Indian investors should have a solid understanding of the AI landscape and be well-positioned to capitalize on its potential.

Best Stock Brokerages for AI Stocks in India

Given the rising popularity of AI stocks, there are now plenty of online brokers, robo-advisors, as well as full-service brokerages that offer access to these stocks in India. Some of the best ones to consider include:

Libertex

Libertex is a well-known and versatile trading platform that recently expanded to include the cryptocurrency market. However, before that, it spent years perfecting its stock and forex trading services. As such, it is one of the best platforms for purchasing AI stocks in India. The company’s design is user-friendly and intuitive, and the platform offers incentives to users who opt to sign up, such as tempting competitions, prizes, and more.

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The platform has a minimum deposit of $10, or its equivalent in different currencies, while its commissions are the lowest in the market. For most trades, the company charges zero fees. Meanwhile, it is also highly accessible, offering a web version as well as Android and iOS apps.

Admiral Markets

Next, we have Admirals, also known as Admiral Markets. This is an excellent choice for both investor education and a wide array of available assets. The platform offers an extensive range of shares, forex, and CFD markets. This, of course, includes AI shares, as well as other types of investments. It is worth noting that Admiral Markets has a $100 minimum deposit, so it might be best for those who have slightly higher amounts dedicated to investing.

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Its Premium Analytics features Dow Jones News, Trading Central signals, and Acuity Trading’s sentiment analysis. The company serves over 48,999 clients, according to 2022 data, and it holds over $82 million in clients’ assets. On top of that, it includes a unique set of risk management tools that can protect investors from volatility. Finally, after a $6 fee, it has rather competitive pricing, with that all-in cost for its commission-based account being only 0.7 pips.

What Is AI?

Artificial Intelligence, or AI, is a spectrum of technologies that allow computers to perform a variety of advanced functions, such as being able to understand, translate, and process written language, analyze data, make calculations, make decisions based on specific parameters, and even make recommendations.

In other words, it is a scientific field concerned with creating computers and machines that can, ideally, reason, learn, and act in a way that would typically require human intelligence. However, as a concept, AI is fairly old at this point in history with a heritage going back nearly 70 years now. Over the decades, it has become better and better, using technologies such as Machine Learning and Deep Learning to become exponentially more powerful and capable.

Of course, thanks to the computing power that they have at their disposal, these machines and computers are capable of absorbing and processing data much faster than humans. The same is true when it comes to decision-making. Another advantage is that the AI is not held back by emotions, such as fear or greed. This is why one of its most common use cases today is in investing through the use of trading bots.

What Are the Use Cases for AI?

As of right now, use-cases for AI are still fairly limited. Researchers and developers have gotten far over the last 65+ years, but this area is largely still experimental. That’s not to say that AI tools are not being used already. We have already mentioned their usage when it comes to trading bots, but the same is true when it comes to chatbots.

In other words, AI can trade assets on your behalf, accommodating thousands of investors and earning them money while they are free to pursue their other goals. Countless companies use AI chatbots for customer service, allowing them to be the first line of communication with users who have questions upon coming to the company’s website.

In 2014, Google also acquired an AI company called DeepMind Technologies, which created a Neural Turing Machine which allowed computers to mimic the short-term memory of the human brain. AI is also used as an autopilot by Tesla and other companies that seek to produce self-driving cars. AI can help with banking fraud detection, and cybersecurity. It can serve as a virtual assistant and serve across the board in sectors such as healthcare, finance, retail, transportation and more, helping them by improving accuracy, efficiency, and quick decision-making.

Which Companies Are the Main Players in the AI Sector?

For years now, AI has been one of the biggest obsessions of tech companies, both big and small. However, some of the tech giants, such as Alphabet Inc (GOOG), Amazon (AMZN), Microsoft (MSFT), IBM (IBM), and others, have been integrating it and using it for years. The same is true for ambitious startups that are seeking to make a name for themselves in the field.

Alphabet’s Google has been developing AI for over two decades now, developing products such as Google Translate, Google Lens, and alike. Google also uses AI for search engine predictions, helping users find what they are looking for with greater precision and accuracy. Amazon has a similar idea, using AI to predict consumer demand, manage inventory, evaluate product availability, and more. It is also famously using AI in its warehouses.

Microsoft also dabbles in AI, using it to protect user data and code while the data is in use within the cloud. Apart from that, it uses AI to accelerate time to market, deliver new and innovative experiences, boost security with Azure, modernize data processing and usage, seamlessly integrate apps, systems, and more. Even IBM uses AI to extract information from photos, transcribe and understand spoken words, pull patterns and insights from written text, which helps with translation and natural language understanding, speaking what was written, and vice versa, and alike.

These and many other companies are using AI to advance the modern age, and we have been using their products for years without even knowing that AI is involved. Of course, as AI continues to improve and mature, so do these services and tools become better and more useful to users around the world.

The Rise of ChatGPT and the Commercial AI Arms Race

Going back to ChatGPT, the story about how this chatbot went live and how quickly it completely consumed both Wall Street and the tech industry is quite fascinating. It started in November 2022, when the company OpenAI decided to announce its new product and release it in early 2023 to be used publicly for free. The decision to release the bot, which version to use, and alike, is a complex story in and of itself, but by the end of it, ChatGPT was born and released to the public, causing chaos in the tech industry.

According to OpenAI, the company has trained a model called ChatGPT which interacts in a conversational way. The dialogue format allows the bot to answer direct questions, follow up questions, admit its mistakes, challenge incorrect premises, reject inappropriate requests, and more. In other words, it is by far the most advanced chatbot available on the market, leading to a massive AI boom.

Some users have since complained that ChatGPT is giving biased or even incorrect answers. Some researchers have criticized OpenAI for being reckless. Some schools have even banned it after students started using it to create AI-generated homework.

Despite all of this, however, ChatGPT emerged as a massive breakthrough in AI, and a revolutionary new solution, which quickly led to its acquisition by Microsoft. Microsoft’s competitors, on the other hand, started investing massive amounts into the development and usage of their own AI solutions, as well as the acquisition of other promising startups.

Google, for example, ramped up efforts to compete with ChatGPT by investing in a rivaling generative AI startup. According to the company, it had invested more than $300 million for a 10% stake in Antrophic — OpenAI’s rival founded by some of OpenAI’s former employees.

Similar examples can be found around the world, where megacorporations jumped on the AI bandwagon seeking to be the first to publish the next big product on the AI market.

What Is the Safest Way in Which I Could Invest in AI?

If you are sold on the idea of investing in AI, one last thing to learn about it all is how to invest in a safe way. Similar to investing in any other kind of company, information is key. That means doing research and learning everything that you can about the company that interests you.

The first thing that you need to focus on is making sure that the firm that interests you is legitimate. AI has brought a flood of new startups, new investors, and new opportunities. All of that means that there is a lot of money in this sector right now, and whenever there is a lot of money and a lot of inexperienced investors seeking opportunities, there are also scammers looking to trick them and earn some money.

This means that you need to carefully check the firms, whether they are registered and regulated, what their product is, their history, their backers. Read reviews published by trustworthy sources, and check out advice given by experts in the field. Any company that promises too much while being basically unheard of is likely fake or at best, legitimate but uncertain.

However, the safest way to invest in AI stock is to consider AI-focused exchange-traded funds (ETFs). There are several reasons why this is a good idea. First, ETFs provide exposure to a broad range of AI companies. Second, these are all real, public companies whose stock is listed on prominent exchanges. This means that the experts have evaluated them and have found that they are the real deal. Third, investing in a broad range of stocks means that you will diversify your portfolio, which is one of the base rules of successful investing — never put all of your eggs in a single basket.

An advantage of AI ETFs also lies in the fact that you don’t have to pick the stocks that you would invest in on your own. The best opportunities have already been selected by expert investors, who have created a relatively safe collection. That way, even if one or several stocks perform negatively, others will still allow the entire ETF to perform well in a group effort.

Top 5 AI-Focused ETFs:

Global X Robotics & Artificial Intelligence ETF (BOTZ): BOTZ seeks to provide investors with exposure to companies involved in the development and production of robotics, automation, and artificial intelligence technologies. It invests in companies that are expected to benefit from the increasing adoption of automation in various industries, such as manufacturing, healthcare, and finance. The ETF is diversified across different sectors and geographies, with the largest holdings in companies such as NVIDIA, Intuitive Surgical, and Keyence.

iShares Robotics and Artificial Intelligence ETF (IRBO): IRBO aims to track the investment results of an index composed of companies involved in the development and production of robotics and artificial intelligence products and services. It invests in companies that are expected to benefit from the increasing use of robotics and AI in various industries, such as healthcare, manufacturing, and logistics. The ETF is well-diversified across different sectors and geographies, with the largest holdings in companies such as NVIDIA, Intuitive Surgical, and Keyence.

First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT): ROBT seeks to provide investors with exposure to companies involved in the development and production of robotics, automation, and artificial intelligence technologies. It invests in companies that are expected to benefit from the increasing use of automation and AI in various industries, such as healthcare, finance, and logistics. The ETF is diversified across different sectors and geographies, with the largest holdings in companies such as NVIDIA, Amazon, and Microsoft.

Global X Future Analytics Tech ETF (AIQ): AIQ seeks to track the investment results of an index composed of companies involved in the development and utilization of artificial intelligence and big data analytics. It invests in companies that are expected to benefit from the growing importance of data analytics and AI in various industries, such as healthcare, finance, and consumer goods. The ETF is diversified across different sectors and geographies, with the largest holdings in companies such as NVIDIA, Alphabet, and Amazon.

WisdomTree Artificial Intelligence ETF (WIAI): WIAI seeks to provide investors with exposure to companies involved in the development and utilization of artificial intelligence technologies. It invests in companies that are expected to benefit from the increasing adoption of AI in various industries, such as healthcare, finance, and consumer goods. The ETF is diversified across different sectors and geographies, with the largest holdings in companies such as NVIDIA, Alphabet, and Amazon.

Overall, these ETFs offer investors a way to gain exposure to the growing importance of AI technology in various industries. However, investors should conduct thorough research and consult with a financial advisor before investing in any of these ETFs, as they do carry risks and expenses.

The Technology Powering ChatGBT Used in Automated Trading

The technology behind ChatGPT, which powers its predictive capabilities, has been used for many years in finance to develop automated trading algorithms. These algorithms, such as Blackrock’s Aladdin, have been used to generate substantial returns for their elite clientele. However, this technology has not been widely publicized until recently, making now an opportune time to explore its potential for investing.

Automated trading software, also known as algorithmic trading, uses advanced mathematical models and algorithms to analyse market data and make trading decisions. The software is designed to monitor financial markets and execute trades automatically based on predetermined criteria and trading strategies.

The software can be programmed to execute trades based on technical indicators, such as moving averages or Fibonacci levels, or fundamental factors such as earnings reports or economic data. The algorithms can also analyse news articles, social media sentiment, and other non-traditional data sources to make trading decisions.

Once the trading criteria have been met, the software sends buy or sell orders to the broker, which then executes the trade on the investor’s behalf. The software can also manage the investor’s portfolio, automatically adjusting the allocation of assets based on market conditions and the investor’s risk tolerance.

Benefits of Automated Trading Software

Automated trading software offers several benefits to investors, including increased speed, efficiency, and accuracy in making trading decisions. The software can analyse vast amounts of data quickly and make trading decisions in real-time, which can be especially advantageous in fast-moving markets.

The software is also immune to emotional biases and human error, which can often lead to poor investment decisions. By removing the emotional element from trading, automated trading software can help investors avoid common pitfalls, such as buying high and selling low.

Additionally, automated trading software can help investors save time and effort by eliminating the need for constant monitoring of financial markets. The software can run 24/7, allowing investors to take advantage of trading opportunities even when they are not able to monitor the markets themselves.

Risks of Automated Trading Software

While automated trading software offers several benefits, it also comes with risks. The software is only as good as the algorithms and trading strategies used to program it, and a poorly designed algorithm can lead to significant losses.

Additionally, the software can be vulnerable to technical glitches and other errors, which can result in unintended trades or other issues. Investors using automated trading software should always have a backup plan in place to mitigate potential losses.

Furthermore, automated trading software can contribute to market volatility and lead to “flash crashes” if multiple algorithms are executing trades simultaneously. Investors should be aware of the potential risks associated with automated trading software and carefully consider their investment goals and risk tolerance before using it.

Most Reliable Stock Trading Bots for Indian Customers

The following stock trading bots have been thoroughly tested by our team over a period of six months from multiple accounts and have been concluded to be legally compliant and to abide by the strictest security and payment processing protocols. These bots have been proven to identify AI stocks, as well as ETFs, to invest accordingly on their users’ behalf:

How Is India as a Whole Investing Into AI?

India has been making significant investments in research and development (R&D) in artificial intelligence (AI) and other key digital technologies in recent years. The government of India has identified AI as a key area for national development and has launched several initiatives to promote AI research and development in the country.

In 2018, the government established the National Program on AI (NPAI), which aims to establish India as a global hub for AI research and development. The NPAI includes initiatives such as establishing AI research centers of excellence, creating a national AI marketplace, and promoting research collaborations between academia and industry.

Additionally, the Indian government has established the AI for All program to promote AI education and awareness among students and professionals. The program aims to train over one million individuals in AI and related technologies by 2021.

Several academic institutions in India are also actively involved in AI research and development. The Indian Institutes of Technology (IITs) are leading research in areas such as machine learning, natural language processing, and computer vision. Other institutions such as the Indian Institute of Science (IISc), the Indian Statistical Institute (ISI), and the Tata Institute of Fundamental Research (TIFR) are also involved in AI research.

The Indian private sector is also investing in AI and digital technologies. Companies such as Infosys, Wipro, and Tata Consultancy Services (TCS) are developing AI solutions for industries such as healthcare, finance, and retail. Additionally, startups such as Haptik, SigTuple, and Niramai are also actively involved in AI research and development.

Overall, India is making significant investments in AI and key digital technologies and is positioning itself as a global hub for AI research and development.

Conclusion

Investing in AI can be an exciting opportunity for investors who want to take advantage of the growing importance of AI technology in various industries. However, it is important to conduct thorough research before investing in any AI-focused ETFs, and to consider factors such as the ETF’s expense ratio, diversification, and risk tolerance. Additionally, it is always recommended to consult with a financial advisor to determine the best investment strategy for your individual goals and risk tolerance.