Editor’s Note: Today, we’re doing something a little different… As regular readers may have noticed, we’ve been featuring Jeff Brown this week in the Market Minute. And for good reason…

Jeff recently latched on to an unstoppable technology trend: artificial intelligence. It’s something he’s convinced will change life as we know it – and in some ways, already has.

That’s almost impressive enough as it is. But Jeff’s found a way to profit on this trend, and it could hand early investors 40x their money as this market matures…

 “I propose to consider the question, ‘Can machines think?’”

This was the first sentence of a 1950 paper called Computing Machinery and Intelligence, written by Alan Turing.

Turing is a name you might recognize. Born in London in 1912, he was a mathematician, cryptanalyst (one who studies cryptographic security systems), and early computer scientist – among other things. He was a prominent figure during World War II, as he developed a method to crack the cryptographic codes used by the Germans.

The story of Turing and the importance of his work was brought to life in the 1983 novel Alan Turning: The Enigma, as well as the 2014 film The Imitation Game.

Yet, in the years to come, I believe that Turing will be most remembered as being the father of artificial intelligence (AI).

One of the key concepts introduced in Turing’s paper is the Turing test. Simply, this test determines whether a “machine” – or as we’d call it today, an AI – is indistinguishable from a human.

In a Turing test, a human interrogates two subjects – one a human and the other an AI – to determine which is human. The conversations that take place in a Turing test are limited to text, just like a conversation in a chat window or text message. This is done so that the AI isn’t required to render human-like speech.

So, for an AI to pass the Turing test, it does not need to be sentient – just to appear so.

To date, the Turing test has not been passed by any AI. And while this is not a near-future event, I am certain that this will happen in less than eight years. My prediction is before the end of 2026.

And that’s not a baseless prediction. Machine learning (ML) and AI software is improving month after month. 2019 will be a pivotal year for semiconductors optimized for running AI, which will only accelerate development. And as more and more companies adopt and implement AI, there will be exponential growth in application-specific improvement.

Put simply, the more we use the technology, the smarter and more useful it gets.

A Look Into the Future

Imagine a world where we can use a chat window on our phone, laptop, or desktop to talk to a seemingly “real” person at the other end of the line… But with a near limitless ability to help answer questions and assist with daily tasks.

I, for one, can’t wait for this. We’re so close. All of those tasks that consume so much of our time – making an appointment, disputing a health insurance claim, finding a receipt, replying to an e-mail, ordering groceries, looking up a schedule – will all be at our fingertips with the help of a personalized digital assistant… an AI.

And while no AI has yet passed the Turing test, the technology is getting impressively good at performing specific tasks. Companies are compiling large data sets of information and using it to train AIs for their assigned task.

I know that this concept of an artificial intelligence might be hard to grasp. So, I have a small favor to ask.

Please click this link to see a short presentation by Google CEO Sundar Pichai. (Or, if you’re reading a printout of this issue, please use a computer or smartphone to look up “Google’s AI Assistant Can Now Make Real Phone Calls.”)

I have to warn you, though… what you’ll hear might startle you.

The AI makes two phone calls. One to schedule a haircut appointment, and the other to make a reservation at a restaurant. It’s so lifelike, the humans receiving the call had no idea they were talking to an AI.

This caused quite a stir in Silicon Valley. Many believed that an AI should be required to introduce itself as such before continuing a conversation, so as to not “deceive” the human on the other end of the line.

There’s no other way to say it… It’s impressive. It’s so good that it’s not a stretch to imagine widespread use of the technology.

And if you’re wondering how much AI technology is being used (or not), please consider this…

Anyone that’s used a searched engine… spoken to an Amazon Echo speaker… called into a call center… or driven in a Tesla… has used AI and not even realized it. It’s that pervasive.

AI is being used right now for self-driving cars, image recognition, speech recognition, facial recognition, high-frequency trading, network optimization, cybersecurity, and on and on…

To say this is a high-growth market is an understatement. In 2017, the market for AI software was a mere $2.75 billion. Yet the forecast for 2025 is an astounding $78 billion. That’s 28 times larger in just seven years.

The market for AI chipsets (semiconductors) is equally impressive. Just $1.6 billion in 2017, current forecasts are for $66 billion by 2025. This is 40x from where we were in 2017, implying even more accelerated growth than AI software during the same timeframe.

Breakout Year

2019 will be a breakout year for AI, in both consumer and enterprise applications. A combination of small, powerful semiconductors combined with advanced, standardized AI software algorithms has brought us to this inflection point. And a small number of companies focusing on this technology will reap the rewards in the coming years.

When looking at these companies and the problems they solve, I’m not interested in incremental improvements, or doing something just 20% better. Rather, I like to see small companies that help usher in entirely new technologies and new approaches to solving existing problems. And in some cases, companies that provide life-saving innovations.

It’s these companies that will deliver outsized returns to investors in 2019 and beyond.

The AI trend is just now picking up steam. Wall Street hasn’t yet grasped how important it will be. By reading this, you’re already ahead of the curve.

Regards,

Jeff Brown
Editor, Exponential Tech Investor

P.S. The AI trend is just now picking up steam… and Wall Street still hasn’t figured it out.

But that’s not the only big prediction I have for 2019…

I think 2019 will be a banner year for tech companies. And that’s why I’ve put together a presentation where I reveal what I think will be the biggest investment story of the year. This is my biggest, boldest prediction to date.

Fair warning, this presentation may not be for everyone. Not everyone can handle the type of volatility this sector sees. But, if you’re looking to potentially pocket a small fortune, I urge you to watch this presentation now. It will be taken down tomorrow at midnight.