Artificial Intelligence has sparked "euphoria" but for Kevin Kruczynski, investment manager at GAM Investments, wise investors should look for practical, innovative applications in areas such as healthcare.
He warned against the current "euphoria around AI", given how long it can take for fast-moving technological developments to become properly tested, adopted and embedded.
Instead, he has urged investors to consider areas where early AI adoption already has provable applications.
Kruczynski said: "Over the last year or so, the stars have aligned as advancements in algorithms, graphics processing unit (GPU) technology and data accessibility, enabled the launch of Chat-GPT.
"This brought AI into the limelight, and has sparked intense debate among investors, businesses and the broader public over its application and use.
"However, it is often forgotten that many organisations have been tinkering with innovation behind the scenes for decades to cultivate and harness its potential applications, such as healthcare."
According to Kruczynski, healthcare has long been touted as a likely area for early AI adoption, as it offers the promise to enhance the quality, effectiveness and availability of care.
He said: "It is a setting that creates a tremendous volume of data, which can be employed to train AI systems to improve diagnosis, treatments and prevention.
"Healthcare professionals regularly make complex decisions based on incomplete information. Therefore, AI models offer great opportunities to analyse extensive data sets and offer valuable insights to assist the decision-making process."
He cited ways in which AI has helped the healthcare sector "for decades". These include:
- Stanford’s MYCIN, an early AI tool developed in 1972 for diagnosing blood infections.
- Computer-assisted detection systems using AI algorithms to scrutinise medical images for potential irregularities emerged during the 1980s and 1990s.
- Developments in radiology, which help professionals to plan and guide radiotherapy treatment, with the aim of minimising damage to healthy tissue and improving patient outcomes.
He said: "Given this context, it is unsurprising that disruptive healthcare companies within our portfolio use AI to improve their product offering, while helping to widen their technological moats, or a company’s technological competitive advantage."
Names in the frame include Intuitive Surgical, which provides robotic surgical systems.
The team also invests in Omicell, which provides medication management solutions using AI to improve the accuracy of medication-dispensing systems.
He also invests in Dexcom, a manufacturer of glucose monitoring devices, and Oxford Nanopore, whose nanopore-sequencing technology is "faster, cheaper and more portable than traditional DNA-sequencing methods".
A diagram of medical care
Source: Delveinsight/GAM Investments
Kruczynski added: "We often say 'data is the new oil'. The further along a business is in its digital transformation, the more data it generates.
"We believe the abundance of data, particularly in healthcare, will make it easier for companies to transition into the AI age. Healthcare companies, are among the digital leaders in their respective fields, are well placed to thrive in this era."
