If you think you’ve noticed a flood of business stories centred around artificial intelligence (AI) in recent months, you’re certainly not mistaken.

With the advent of ChatGPT, the spotlight has firmly shifted onto AI, capturing the attention of investors and analysts alike.

In a race to take advantage of AI’s potential and its transformative capabilities, major tech players and especially the FANGMA companies—Facebook (Meta), Apple, Netflix, Google, Microsoft, and Amazon—are pursuing AI investments with a sense of urgency.

Let’s look at how the FANGMA companies are positioning themselves to take advantage of AI’s potential and secure their position in this burgeoning field.

Generative AI Takes Center Stage for Meta and Facebook

In a recent earnings call, Meta Platforms Inc. CEO Mark Zuckerberg underscored the significant role generative AI will have in shaping the future of Meta. Generative AI will soon “touch every single one of our products,” Zuckerberg said, specifically highlighting plans to integrate “AI agents,” such as chatbots and digital assistants, into billions of users’ experiences for tasks like business communication, customer support, and writing code.¹

Meta is also using AI to drive its ranking and recommendation systems, and has plans for incorporating generative AI into the popular messaging platforms WhatsApp and Messenger. Meta is also conducting tests on “visual creation tools” powered by artificial intelligence. These tools have the capability to generate content like image backgrounds and text variations to enhance posts and ads on Facebook and Instagram.²

A select group of advertisers will make up the initial list of invitees to experiment with these new tools in a designated “testing playground” called the AI Sandbox. Additional advertisers will gain access in July, and selected features will roll out for general-purpose ad products later in the year.³

While not as far along in incorporating AI as some of its competitors, due to its wide range of product offerings, Meta sees itself as uniquely positioned to adopt a comprehensive approach to generative AI—an advantage that few organizations can rival.⁴

Amazon Using AI to Revolutionize Customer Experience

Amazon is leveraging AI to enhance its delivery process and ensure faster shipping times by reducing the distance between products and customers. The company is implementing a “regionalization” strategy to dispatch items from warehouses nearest to customers rather than shipping from distant locations. The key focus for Amazon is achieving a lower cost of service through optimized inventory placement and speedy deliveries.

AI is tailor-made for such a task, as it is capable of analyzing vast amounts of data and patterns to predict product demand, determine the ideal locations for distribution, and even optimize logistics and transportation of goods, right down to mapping and planning delivery routes, taking factors like traffic and even weather conditions into account.⁵

Recent reports also suggest that Amazon is developing a new generative AI technology called Burnham. This technology aims to enhance Amazon’s smart home robot, Astro, by integrating large language models to provide a conversational spoken interface. Although it is still a work in progress, Amazon’s plans for Burnham and Astro involve introducing “contextual understanding.” This means that the robot, using AI, will be capable of identifying and addressing issues like alerting homeowners about a left-on stove, proactively cleaning up broken glass to prevent injuries, or even calling emergency services when someone requires assistance.⁶

How Netflix Harnesses AI in Entertainment

Netflix recently premiered a captivating three-minute animated short called “The Dog and the Boy,” marking a milestone in using AI technology to generate animation backgrounds. In response to a labour shortage within the Japanese anime industry, Netflix took the lead in integrating generative AI into animation, demonstrating the potential to expedite production times, and offering artists innovative tools to enhance their work in the entertainment industry.⁷

Netflix is likewise employing AI in live-action productions. With the proliferation of new original series in recent years, Netflix has formed partnerships with a number of venture capital-backed AI startups. These collaborations provide visual effects artists with invaluable tools to meet the demand for fresh content. Certain AI tools already enable special effects artists to accomplish in 20 minutes what previously required three full days of their time.⁸

While the current focus lies in AI’s capacity to de-age actors, recreate the voices of deceased performers, and digitally sharpen and enhance aging film and TV footage, AI tools capable of writing complete scripts, composing film scores, and generating personalized video game experiences are the next expected breakthroughs in this field.⁹

Understandably, these possibilities have raised concerns within certain sectors of the entertainment industry. A significant point of contention in the ongoing strike by the Writer’s Guild of America (WGA) revolves around future potential applications of AI in Hollywood. Specifically, the WGA has identified a clause in a Netflix contract that permits the unrestricted usage of an AI simulation of an actor’s voice through “all technologies and processes now known or hereafter developed, throughout the universe and in perpetuity” as particularly problematic.¹⁰

Google Unveils ‘Search Generation’ Powered by AI

At Google’s annual I/O developers’ conference in May, Alphabet CEO Sundar Pichai announced the widespread integration of AI into Google’s offerings. “We are reimagining all of our core products, including search,” said Pichai.

Part of these changes include the global expansion of Google Bard, the AI-powered chatbot, which is currently available in English-speaking countries. Google plans to make Bard accessible to users in over 180 countries and in multiple languages. Additionally, Google Bard will be “multimodal,” offering not only text-based responses but also AI-generated images in an effort to distinguish itself from its competitor, ChatGPT.¹¹

Moreover, AI enhancements will be introduced to popular Google products such as Gmail and Google Photos. Users will soon be able to draft emails using AI or apply advanced image manipulation techniques to photos, such as centring figures and colouring empty spaces.

However, the most ground-breaking change is happening to Google’s core product: search. Google introduced an invite-only demo of its new “Search Generation Experience” during the conference, marking the most significant upgrade to Google search in two decades. This enhanced search experience is powered by Google’s latest and most robust AI model, PaLM 2. Throughout the invite-only phase, Google will closely monitor the quality, speed, and cost of search results to maximize the efficiency of the Search Generation Experience.¹²

The primary goal of the Search Generation Experience is to provide users with more accurate and conversational results than previous iterations of Bard. Google intends to prevent misleading information by prioritizing accuracy and citing trustworthy sources in Bard’s responses, reducing the occurrence of so-called “hallucinations” where an AI generates inaccurate content. Furthermore, Google will implement image markup on AI-generated images to aid users in verifying the authenticity of pictures, a move towards promoting accuracy and reliability.¹³

From Consumer Products to Cloud Services: Microsoft’s AI Revolution

Having poured a reported $13 billion investment into OpenAI, the startup responsible for ChatGPT, Microsoft has wasted no time in integrating AI technology into its many offerings.¹⁴

Microsoft has made significant improvements to its AI-based search tools and announced the release of an open preview of its enhanced Bing search engine and Edge web browser. These tools now offer visual and multimodal searches, and the ability to generate charts, graphs, and other visuals within a search. Additionally, Bing Chat allows users to save and revisit previous interactions, enabling the AI to deliver more personalized and improved answers over time.

Bing is having a moment overall, surging in popularity since integrating GPT-4 into its programming. With over 100 million daily active users and a 4x increase in daily installs of the Bing mobile app, Microsoft’s AI-driven search capabilities have gained significant traction.¹⁵

However, Microsoft’s commitment to AI goes beyond consumer-facing products. Its cloud services are crucial to powering AI systems and driving innovation across various industries.

In the manufacturing sector, companies like Mercedes-Benz, Strabag, and Coca-Cola have harnessed the power of Microsoft’s cloud services to boost efficiency, reduce costs, and bolster security. Retailers such as Unilever, Campari Group, and Żabka have transformed customer experiences through AI and data-driven insights. Financial services providers like Finvero, HDFC Bank, and Sapiens have reinvented their offerings through cloud capabilities and innovation. In the transportation and energy industries, organizations like Ecolab, FirstGroup, and Deutsche Bahn have made significant strides in sustainability using data and automation. And professional services companies such as Laerdal Medical, Amdocs, and KPMG have been empowered with cutting-edge data and generative AI solutions.

Microsoft’s commitment to AI innovation is evident in its cloud services, providing businesses with the tools and technologies necessary to thrive in an increasingly AI-driven world.¹⁶

Apple Explores the AI Landscape with Deliberation

Unlike many of its competitors in the tech industry, Apple has taken a more cautious approach to embracing AI.

During a recent earnings call, Apple CEO Tim Cook notably omitted any mention of AI in his opening statements. Moreover, when asked about generative AI during the Q&A session, Cook stuck to Apple’s tradition of secrecy by remaining tight-lipped about the company’s potential future projects. Instead, he would only say, “I do think it’s very important to be deliberate and thoughtful in how you approach these things.”

Despite not dropping everything to pivot to generative AI, Cook acknowledged that Apple is no stranger to AI. One example is Siri, the voice assistant that utilizes natural language processing across multiple Apple devices. AI is also integrated into iOS software and can be found in various features of iPhones and Apple Watches. Noteworthy functionalities include fall detection, crash detection, and electrocardiogram (ECG) monitoring.¹⁷

In line with this commitment to health and well-being, Apple is reportedly focusing its AI efforts in this area. Reports suggest that the company is working on an AI-powered health coaching service, internally referred to as Quartz. This service, which would be available for a monthly fee, aims to motivate users to exercise, improve their eating habits, and enhance their quality of sleep. By leveraging AI learning and data from the user’s Apple Watch, Quartz will personalize coaching programs tailored to individual needs. Apple’s health, Siri, and AI teams are said to be collaborating on this initiative, with a potential launch as early as 2024.

Furthermore, Apple’s Health app may be upgraded with the ability to track emotions and manage vision conditions like nearsightedness. Users would be able to log their mood and answer questions about their day, enabling AI algorithms to follow and comprehend their emotional state based on speech, text, and other input.¹⁸

Investing in FANGMA: TECH ETF

In the current stock market, it’s hard to ignore the prominence of the FANGMA tech giants. These six influential companies have such a significant impact on advanced technologies and popular consumer services that it’s highly likely you, along with billions of others, use their offerings on a daily basis. However, the soaring share prices of these companies might discourage investors from individually incorporating all of them into their portfolios.

With the Evolve FANGMA Index ETF (TECH ETF), investors gain exposure to all six companies – Facebook, Amazon, Netflix, Google, Microsoft, and Apple – for a reasonable unit price.

For more information about the Evolve FANGMA Index ETF (TECH ETF) or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

 

Sources:

1. Heath, A., “Mark Zuckerberg says Meta wants to ‘introduce AI agents to billions of people’,” The Verge, April 26, 2023; https://www.theverge.com/2023/4/26/23699633/mark-zuckerberg-meta-generative-ai-chatbots-instagram-facebook-whatsapp
2. Paul, K. & Bhuiyan, J., “It’s a tough time for Meta. Can AI help make the company relevant again?”, The Guardian, May 11, 2023; https://www.theguardian.com/technology/2023/may/11/meta-artificial-intelligence-metaverse-mark-zuckerberg
3. Paul, K. & Dang, S., “Facebook owner Meta announces tests of generative AI ads tool,” Reuters, May 11, 2023; https://www.reuters.com/technology/facebook-owner-meta-announces-tests-generative-ai-ads-tool-2023-05-11/
4. Paul, K. & Bhuiyan, J., “It’s a tough time for Meta. Can AI help make the company relevant again?”, The Guardian, May 11, 2023; https://www.theguardian.com/technology/2023/may/11/meta-artificial-intelligence-metaverse-mark-zuckerberg
5. Kharpal, A., “Amazon is focusing on using A.I. to get stuff delivered to you faster,” CNBC, May 15, 2023; https://www.cnbc.com/2023/05/15/amazon-is-focusing-on-using-ai-to-get-stuff-delivered-to-you-faster.html
6. Pattison Tuohy, J., “Amazon’s working on a secret new home robot that could be more like Rosie,” The Verge, May 12, 2023; https://www.theverge.com/2023/5/12/23721400/amazon-astro-smarter-home-robot-ai
7. Deikova, M., “Netflix Uses AI to Generate Anime Short Film – Reactions Follow,” CineD, February 6, 2023; https://www.cined.com/netflix-uses-ai-to-generate-anime-short-film-reactions-follow/
8. Moses, L., “10 startups bringing AI tech to Netflix, Lucasfilm, Marvel, and more Hollywood studios — and attracting millions in VC funding,” Business Insider, May 8, 2023; https://www.businessinsider.com/ai-startups-netflix-marvel-lucasfilm-holllywood-deepfake-dubbing-vc-funding-2023-3
9. Ibid
10. Scheiber, N. & Koblin, J., “Will a Chatbot Write the Next ‘Succession’?,” The New York Times, May 2, 2023; https://www.nytimes.com/2023/04/29/business/media/writers-guild-hollywood-ai-chatgpt.html
11. “Google Fights Back Against Microsoft With New AI Search Capabilities,” Forbes, May 12, 2023; https://www.forbes.com/sites/qai/2023/05/12/google-fights-back-against-microsoft-with-new-ai-search-capabilities/
12. Dastin, J. & Bensinger, G., “Google I/O 2023: Search king adds AI to respond to Microsoft challenge,” Reuters, May 11, 2023; https://www.reuters.com/technology/google-expected-unveil-its-answer-microsofts-ai-search-challenge-2023-05-10/
13. “Google Fights Back Against Microsoft With New AI Search Capabilities,” Forbes, May 12, 2023; https://www.forbes.com/sites/qai/2023/05/12/google-fights-back-against-microsoft-with-new-ai-search-capabilities/
14. Novet, J., “Microsoft’s $13 billion bet on OpenAI carries huge potential along with plenty of uncertainty,” April 8, 2023; https://www.cnbc.com/2023/04/08/microsofts-complex-bet-on-openai-brings-potential-and-uncertainty.html
15. Nuñez, M., “Microsoft launches new features for its AI-powered Bing and Edge,” VentureBeat, May 4, 2023; https://venturebeat.com/ai/microsoft-launches-new-features-for-its-ai-powered-bing-and-edge/
16. Althoff, J., “The era of AI: How the Microsoft Cloud is accelerating AI transformation across industries,” Microsoft, Apr 24, 2023; https://blogs.microsoft.com/blog/2023/04/24/the-era-of-ai-how-the-microsoft-cloud-is-accelerating-ai-transformation-across-industries/
17. Kerner, S.M., “What are Apple’s plans for generative AI? Tim Cook wants to be ‘thoughtful’,” VentureBeat, May 5, 2023; https://venturebeat.com/ai/apple-plans-generative-ai-tim-cook-wants-to-be-thoughtful/
18. Malik, A., “Apple is reportedly developing an AI-powered health coaching service,” TechCrunch, April 25, 2023; https://techcrunch.com/2023/04/25/apple-is-reportedly-developing-an-ai-powered-health-coaching-service/

 

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