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It may take years to reap rewards from investing in companies involved in the nascent technology .

By Edward Hayes

As AI captures the imagination of individuals and businesses alike , the Boston-based firm hosted a webinar in mid-July highlighting areas where it made sense to invest in AI . The presenters pointed out that the tech is still in its infancy .

“ I think it ’ s really important for investors to understand that the impact of these investments and opportunities may take years for most companies to monetize and subsequently turn into additional sales opportunities or productivity gains ,” said Tiffany Wade , a senior portfolio manager at Columbia Threadneedle .

The reason for that delay is there is a lot of preliminary work firms must conduct . They will have to gather their own data before building and testing AI models . They also need a vetting process to test the security and utility of the models , she said .

That ’ s not to say that there are no current opportunities to invest in AI . Columbia Threadneedle is focusing on groups that are building the infrastructure for the technology .

“ In the short and medium term , we want to follow where we think the dollars are going ,” Wade said . “ Right now , the biggest opportunity is in the picks and shovels of AI .”

The current opportunities include cloud providers and data centers , she said . The companies looking to launch an AI service will need cloud providers to run those applications . Other companies are creating the building blocks of AI , the different data models that determine how the technology learns .

Another area that investors can focus on is internet security . As more data is transferred and used by AI applications , there will be a growing need to protect potentially sensitive information , according to Wade .

“ Companies face traditional security threats such as data breaches but will also face new threats such as malware that could potentially disrupt or alter AI model output or enhanced security threats that are driven by AI ,” she said .

Investors could also look into companies from a wide variety of sectors that incorporate AI into their business platforms to improve efficiency and productivity , including companies that have cost-heavy help desks , Wade said .

One of the industries that can benefit from AI is agriculture ; farmers can use the technology in smart farming , said Dave Egan , a senior equities analyst at Columbia Threadneedle . AI will know where and how many seeds to plant , as well as how best to use pesticides and fertilizer . It will also help farmers increase their crop yields .

SEPTEMBER 2023 | FINANCIAL ADVISOR MAGAZINE | 35