At the Cantech Investment Conference in Toronto, artificial intelligence was a hot topic during a panel discussion with various fund managers.
The spotlight was put on artificial intelligence (AI) as a key trend for 2019 in a panel discussion with various fund managers at this year’s Cantech Investment Conference.
The panel, which was held on the show’s first day on January 29, featured Bill Burnham of Inductive Capital, Rob Ballard of Pathfinder Asset Management, Colin Fisher of Stableview Asset Management and Andrey Omelchak of LionGuard Capital Management.
While the panel were set to discuss their top stock picks of 2019, they first talked about AI after moderator Pardeep Sangha of Haywood Securities highlighted how there are companies active in the AI, gaming and cannabis spaces, all of which were strongly exhibited at the conference.
“We’re super bullish on AI as part of a 10-year cycle,” Ballard said. “[It] has a huge potential to transform business processes and improve efficiency.”
However, Ballard said that there were a couple of difficulties with regards to AI achieving its peak for investors to make money in the space.
“[There]s lots of competition in the venture capital world, so [investors are] buying up a lot of the good companies and paying high valuations. So it’s really hard to find a public company opportunity that does well in the space,” he said.
Further, Ballard said that the AI is a “black box technology” in terms of people being familiar with the space.
“It’s tough to see [and] know what’s really going on. You need to see a customer [to] validate it and talk up the technology so you know what’s good,” he said. “We’re bullish on AI but there’s a couple of… difficulties that prevent it from being [an] easy space to make money in.”
Omelchak said that Montreal, Quebec has become a hub for AI with “billions of dollars” being invested into companies based in the city.
Case in point, various AI research labs formed in Montreal include ones set up by the Royal Bank of Canada (RBC) (TSX:RY), Google (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) were highlighted by Omelchak.
“There’s a lot more capital coming,” he said. “We have not seen much from the public side. Of course there’s not much way to get exposure to AI for public investments, yet there’s a lot of capital in a private domain and the capital is available for those investments.”
Omelchak said that AI is a “big deal” as it’s going to transform the industries and the efficiencies of companies in particular.
Crucially, Omelchak stressed that the rise of AI will lead to the emergence of new product offerings in multiple industries, including the fintech space.
“Financial companies are already investing a lot of money in forming internal AI teams,” he said.
Omelchak said that companies involved in the financial space are looking at improving their internal efficiencies along with implementing AI into their new products.
“The customer experience economics will change as a result of AI application,” he said. “There’ll be a real partnership formed between financial service companies and between technology companies.”
Meanwhile, Burnham said that the lack of data infrastructure is hindering the mass adaptability of AI by these companies, despite their interest in the space.
“AI is very data dependent,” he said. “It requires not just lots of historical data but it requires also streaming real-time data in order to make use of it.”
From an investment point of view, Burnham said that Inductive Capital is interested in companies focused on big data, and moving data from cloud to enterprise as it is a crucial element for AI applications.
“In the short term, from a public investor perspective, one way to play AI is actually to look more at the data layer and look at companies that are enabling these big data applications,” he said. “That, ultimately, is what’s going to feed into these AI platforms.”
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Securities Disclosure: I, Bala Yogesh, hold no direct investment interest in any company mentioned in this article.