Biden’s key new appointments signal support for AI future

Artificial Intelligence (AI) applications like machine learning (ML), deep learning (DL) and natural language processing (NLP) keep multiplying, with the hyper-fast pattern recognition capabilities of AI algorithms able to predict everything from the path of the next hurricane to the most suitable candidate for a job opening.

The dynamism in the sector is a boon for investors, both those managing their own portfolio of AI stocks and people who prefer an ETF like Defiance’s QTUM, which covers a broad range of this disruptive market and has been showing a strong recent performance.

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Things are moving so far and so fast that AI is also attracting a new level of governmental attention. Recent events show that President Biden appreciates the broader impact of AI across a range of industries and sectors, and is aware of its value for the economy, society, and scientific progress, testimony to the strength of this market.

AI is the future

The economic potential of AI is increasingly apparent. The Brookings Institute forecast that AI-related changes would drive $3.7 trillion in increased GDP for North America by 20301, while the McKinsey Global Institute estimated that new and emerging AI technologies could create up to $5.8 trillion in value annually2.

Daniel Araya, a policy analyst at the Center for International Governance Innovation in Canada, says “Technologies that can be developed based on AI will indeed have both economic and military benefit,” adding “we’re talking new weapons, data-driven innovation for industry and automation, and redesigning how our society works from the ground up.”3

It’s almost impossible to think of an industry or sector that isn’t benefiting from AI.

Healthcare is relying on AI

Healthcare, for example, draws on deep learning pattern recognition to help doctors interpret complex scans and make more accurate diagnoses. In 2018, the FDA approved a retinal scan algorithm that can diagnose diabetic retinopathy4.

Additionally, wearable and embedded monitors send real time health data to AI engines to detect impending health incidents, while AI-powered automation relieves healthcare workers from clerical and administrative work so they can focus on more important tasks.

AI in manufacturing boosts the bottom line

In manufacturing, AI enables robotic process automation (RPA) that is faster and more efficient than manual-led processes. AI predictive analytics ensures that machinery is always operating at peak efficiency, resulting in higher quality product, less waste, and a safer workplace with a smaller environmental footprint.

AI is assisting finance

Financial institutions and businesses are employing AI engines to cut fraud and improve financial predictions. ML stock market analysis improves investment decisions for hedge funds, Venture Capital foundations, and individual investors alike.

AI algorithms use behavioral analysis, facial recognition, and thumbprint identification to spot and block fraudulent transactions. PWC estimates that reducing losses from fraud alone will add approximately $30 billion net to global GDP5.

AI is creating a better world

AI in smart utilities helps reduce energy waste and water and gas leaks, and stabilizes the energy grid by predicting surges in demand. As well as lowering the incidence of power outages, it’s estimated that with smart electricity meters and grids, energy companies can add $209 billion to global GDP by 20306.

Even conservation management is using AI. The Rainforest Connection is deploying an AI platform in Costa Rica to combat illegal logging and poaching7, while in Poland, Ewa Guard is spotting illicit dumping8.

AI advances need governmental oversight

In short, AI is bringing in automation in almost every industry and sector, with massive implications for the economy and society. On the one hand, automation is driving productivity, freeing employees from time-consuming drudge work. An EU think tank reported that labor productivity related to AI could rise by 11-37% by 20359.

But it’s also threatening to put an end to millions of low-paid jobs, replacing unskilled labor with algorithms that are more efficient, lower cost, and can work longer and harder, opening up a vital need for policy direction.

The US is stepping up to the AI plate

In April 2021, a virtual Atlantic Council event discussed the importance of AI development for the US economy as part of the race with China for global leadership.10 To that end, the President also just nominated Ramin Toloui, an AI expert, as his assistant secretary of state for economic and business affairs. Toloui will advise Secretary of State Anthony Blinken on taxation, competition with China, and more, where his expertise in AI could be as significant as his economics background.11

Investment in AI

The Biden administration is putting its money where its mouth is. In 2020, the US National Science Foundation (NSF) established five new institutes around the country, each focusing on a different AI application for the economy and society, and promised $20 million to each over the next 5 years. The Department of Agriculture’s National Institute of Food and Agriculture promised the same amount to two more institutes that will concentrate on AI applications for crop yield, pest resistance and food distribution. In total, the US government spent close to $5 billion on unclassified AI research in 2020.12

At the same time, the US is investing in onshoring production of crucial microprocessor chips, to reduce its dependence on an extended supply chain originating in China.

Taking the lead on AI policy

Seizing control of the global AI market means more than economic lift. Whoever leads in AI development and application will also set the ethical goal posts for hot AI issues like algorithmic bias, facial recognition, data privacy, and the influence of corporations on AI research.

Safra Catz, a member of the NSCAI, said “This really forces us to consider who will determine the objectives, designs, and regulatory parameters for AI, and the broad definition of AI tools, decreasing cost of cloud computing, and new approaches to data, or expanding AI opportunities globally.”13

That’s why Biden brought the position of director of the Office of Science and Technology Policy (OSTP) into the cabinet, and chose Alondra Nelson as the OSTP deputy director. Nelson studies the societal impacts of emerging technologies like artificial intelligence. “Her appointment suggests to me that the Biden administration understands that effective science and technology policy must also consider the social influences on and implications of scientific advancement.” notes Karen Hao, senior AI editor at MIT Technology Review.14

Antony Blinken also appreciates these implications. During his Senate confirmation hearing, Blinken pointed out “an increasing divide between techno democracies and techno autocracies. Whether techno democracies or techno autocracies are the ones who get to define how tech is used…will go a long way toward shaping the next decades.”15

AI continues to be a dynamic sector

The US government’s interest in AI is only one of many indicators of strong and sustained growth in the market. The IDC predicts that global AI revenues will reach $554.3 billion total revenues at a compound annual growth rate (CAGR) of 17.5% by 2024.16

For next-generation investors who are eager to take part in the AI revolution, the QTUM ETF offers an appealing way to mitigate single-stock exposure to risk by spreading investment across a number of promising AI stocks, and the quantum computing stocks which make AI possible. QTUM follows the BlueStar Quantum Computing and Machine Learning Index (BQTUM), which tracks approximately 71 global companies involved in research and development of AI and/or quantum computing.

ETFs such as Defiance’s QTUM, which has risen in value over 20% over the year preceding September 2021,17 are looking to capture the dynamism in this sector for the next gen investor.

1 “How artificial intelligence is transforming the world” April 24, 2018

2 “Notes from the AI frontier: Applications and value of deep learning” April 17, 2018

3 “The race to the top among the world’s leaders in artificial intelligence” December 9, 2020

4 “The impact of AI on business and society” October 16, 2020

5 “The global economic impact of 5G”

6 “The global economic impact of 5G”

7 “Rainforest Guardians: Saving Rainforests by Listening”

8 “Ewa Guard = Computer Vision locating illegally dumped tires” September 23, 2020

9 “Artificial intelligence: threats and opportunities” March 29, 2021

10 “NSCAI Commissioners on the Importance of AI and Its Ability to Reshape the Future Fight” April 29, 2021

11 “President Biden Announces Five Key Nominations” July 30, 2021

12 “The race to the top among the world’s leaders in artificial intelligence” December 9, 2020

13 “NSCAI Commissioners on the Importance of AI and Its Ability to Reshape the Future Fight” April 29, 2021

14  “The Biden administration’s AI plans: what we might expect” January 22, 2021

15 Secretary of State Confirmation Hearing, January 19, 2021

16 “IDC Forecasts Improved Growth for Global AI Market in 2021” February 23, 2021

17 (Accessed September 13, 2021)