Nvidia took center stage in 2023 amidst the AI hype run-up, laying down over 238% in gains last year alone. Momentum, alongside skepticism, has pushed this trend forward into 2024 and is now stronger than ever.
The AI stalwart reported its Q4 earnings last week, and needless to say, investors were pleased. The report arrived on the scene with $22B in quarterly sales (265% year-over-year growth) paired with a 769% annual jump in net income and forecasts for even more growth this quarter.
The bigger picture
But Nvidia is just an AI frontrunner here, representing a much larger undercurrent in the tech sector — ultimately, Nvidia is helping to establish a whole new industry.
Globally, the AI industry is valued at around $200B (2023) for now, but it's projected to grow nearly 10X by 2030 to almost $2T in value.
Artificial intelligence is no longer just chatbots — it's finding its way into all aspects of life. AI is now being used in everything from drive-throughs and medical procedures to banking and investment advice.
Yes, AI will be involved in our money too — how will it impact our money?
Streamlining the analysis process: AI is now at the forefront of most financial analysis being done by lenders, and it has been for a while now. Algorithms scour your personal information and credit history to spit out credit card, personal, auto, home, and even consolidated lending offers in a matter of seconds. Think UpStart. In some cases, this is efficient and helpful, whereas it also tends to leave out nuance and the human touch, which hurts some borrowers. But — to counter this, there are also other AI models being developed specifically for borrowers with limited credit history.
Democratizing advice: ChatGPT was just the start — AI applications have grown a lot since then, even getting into financial advice. Origin recently launched our own AI financial assistant, SideKick, which self-describes as "an AI-certified financial assistant that works at Origin. I have been designed to provide knowledgeable and informative financial advice." Yes, we asked SideKick to describe itself. While these efficient and effective assistants can't replace a real-life financial planner, they're a useful wrinkle of AI in finance.
Technical applications: AI also brings a laundry list of technical use cases to the world of finance. There are firms developing systems that help with things like — security, fraud detection, risk management, ID verification and KYC rules, money management, derivatives trading, quants, and much, much more.
Practical implications: From the consumer standpoint, AI began interweaving itself into our finances a long time ago, and the most recent advancements just represent a fully fleshed-out version of it. For us, AI will likely be used to analyze all of our data and provide recommendations based on that, not to mention automate a lot of mundane tasks like balance inquiries, transfers, loan apps, and more — and hopefully make us all much more efficient.
What about the job market? The question everyone is asking is — will AI take my job? The simple answer is probably not, at least not for now. McKinsey Global Institute ran a simulation on this and estimates that about 14% of employees globally may need to change careers by 2030 due to AI replacement, aligned with Goldman Sachs's projection that 300M full-time jobs could be replaced. Roles closest to the line of fire are; customer service, accountants, research, warehouse work, and retail. The least affected are; teachers, law professionals, directors, C-suite, Psychologists, surgeons, computer system analysts, and writers/artists, reports Nexford.
But, it's not all bad news. We've undergone large technological leaps before, and automation has undoubtedly been replacing some monotonous tasks for quite a long time. The advancement of AI is also likely to create a lot more jobs in engineering, cybersecurity, developers, robotics, ethics, and more. In fact, McKinsey's simulation projects that AI will add around $13T to global GDP by 2030.
