Bill Gates's Open Letter Suggests AI's Potential Is Both Exciting And Terrifying (2024)

Key takeaways

• Microsoft founder Bill Gates has published an open letter on the potential benefits and drawbacks of artificial intelligence
• He singled out climate change, productivity, education and healthcare as the industries most ripe for an AI revolution
• Some companies in these fields have already seen an AI-related boon, but AI ethics might be the long-term play for investors

Artificial intelligence has been on everyone’s lips in recent weeks. A flurry of new AI-powered features from tech companies are hotting up the race to dominate this exciting new space.

Bill Gates being the latest to publish his thoughts on how artificial intelligence could revolutionize different industries.

But he doesn’t stop there, also warning against the dangers of a sentient AI. It sounds like science fiction right now, but those companies setting up ethical and legal frameworks for AI may fare better in the years ahead - as could their share prices.

Buckle in for Gates’ take.

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What are Bill Gates’ views on AI?

Bill Gates's seven-page open letter outlines his personal views on the future of AI in the next decade or so. According to the Microsoft founder, “The development of AI is as fundamental as the creation of the microprocessor, the personal computer, the Internet, and the mobile phone.”

The company Gates founded, Microsoft, is looking to become a leader in AI. Its $10bn investment in OpenAI, the creators of ChatGPT, has already borne fruit with the same technology being used to power its Bing chatbot and Microsoft Copilot program. The Bing search engine just hit the 100m daily active users milestone.

Wall Street has responded favorably to Microsoft’s large strides in AI, with the share prices up over 16% since the beginning of the year.

Growth areas Gates identified

So, which industries did the philanthropist single out for AI making the most impact? Some we’ve already seen some moves made by major players, while others are ripe for the taking.

Productivity

Gates describes ChatGPT’s “ability to express ideas will increasingly be like having a white-collar worker available to help you with various tasks”.

This is the easiest area for Big Tech to capitalize on, as they can integrate AI models into their existing products. Microsoft announced its Microsoft 365 Copilot generative AI last week, which promises to cut down on busywork for its work apps including Word, Excel and Teams. Microsoft stock rose 1.2% at the news.

Google GOOG is also getting in on the action by integrating generative AI into Google Docs, Sheets and Chat among others. The announcement, which came just days after Microsoft’s, increased Alphabet’s share price by 3.14%.

Healthcare

Gates believes AI could bring global equality to healthcare, eliminating language barriers and access issues. He also believes it can release healthcare workers from administrative burdens that take their time away from caring for patients.

Some strides have been made in this field. GE HealthCare, a spin-off from General Electric GE , has previously launched AI-powered cardiac ultrasound systems and deep learning for MRI scanning. Its 30% increase in share price since the start of the year is also likely boosted by its acquisition of AI healthcare company Caption Health.

Chip company Nvidia, which is announcing AI partnerships all over the place at the moment, is now collaborating with health-tech provider Medtronic MDT to develop an AI platform for medical devices.

The platform has “the goal of improving clinical decision making, reducing medical variability and driving better patient outcomes.” Nvidia stock is up a massive 82.74% since the start of 2023.

Climate change

In the open letter, Gates suggests AI can help some of the world’s poorest countries, which are often the first to experience the effects of climate change, fight back.

There’s little to go on at present in this field, but one notable development might be some welcome news for IBM IBM investors. The computing giant has partnered with NASA to use AI technology for climate change discoveries based on NASA’s scientific data.

IBM has also built its first AI supercomputer, Vela, which lives in the IBM Cloud. IBM stock is down 12% this quarter, but this could change if the company continues to commit to AI development.

Education

Gates believes AI will have a marked impact on tailoring personalized learning to students, helping with career planning and providing new tools for low-income students and schools to shorten the skills gap.

With the AI education industry predicted to be worth $20bn by 2027, expect to see much more learning tech emerging onto the scene.

One example is the language learning app Duolingo, which has over 60 million active users, and has now released a subscription tier that utilizes OpenAI’s GPT-4 technology.

"Duolingo Max will give our subscribers an even more engaging way to learn by chatting with Duolingo characters and receiving personalized explanations of their mistakes," CEO Luis von Ahn said. The stock has skyrocketed a massive 79% in 2023.

Ethics in AI could be a long-term stock gain

As much as Gates waxed lyrical about AI’s potential, he also spent a good portion of the open letter discussing the risks of developing the tech. “The world needs to establish the rules of the road so that any downsides of artificial intelligence are far outweighed by its benefits,” he writes.

As part of the 10,000 layoffs Microsoft announced in January, the tech giant laid off its AI ethics and society team. While it stressed that the team's work is now embedded into the wider company and still has its Office of Responsible AI in place, the move raised some eyebrows.

Google, one of the founding fathers of AI and now with its Bard AI model, published its AI Principles in 2018 and aims to “be bold with innovation and responsible in our approach”. Its soft and slow approach seems to be paying off with the stock market, as Alphabet share prices rose over 3% at its beta launch earlier this week.

ChatGPT creator OpenAI was originally founded as a non-profit organization, but billionaire Elon Musk - one of the former founders of the company - has expressed doubts over AI in general, saying regulation “may slow down AI a little bit, but I think that that might also be a good thing”.

The outcome? With Big Tech under scrutiny in other areas, investors will look closely at companies prioritizing AI safety.

The bottom line

It’s important to remember that even with a head-spinning amount of AI-focused announcements from companies, we’re still looking at an industry in its infancy. Bill Gates has done some crystal ball-gazing, but it’s good to take a long-term view when investing in the sector.

Legal and regulatory frameworks will eventually be introduced to avoid the ‘superintelligent AI overlords’ route, but as it stands, Wall Street is happy to see the tech sector innovating after a tough year. Let’s see if the party continues.

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