"More pain than happiness."
That's how one man described the coming impact of artificial intelligence (AI) and automation on humankind.
This wasn't some tinfoil hat-wearing conspiracy theorist.
It came from Jack Ma - the man behind one of the most meteoric rises in modern corporate history.
Ma, founder and chair of Chinese e-commerce powerhouse Alibaba Group Holding Ltd. (NYSE: BABA), said it while speaking in a prestigious slot at the recent World Economic Forum in Davos, Switzerland.
You should be listening to him.
I certainly am.
You see, if you or a member or your family is working and earning between $40,000 and $80,000 a year, you have reason to be worried.
And if you or someone you love makes less than $20 an hour, you should be terrified.
Here's why...
According to recent White House report, there's a 1-in-3 chance that workers in that first group will be replaced by robots and AI in the next few years.
And if you're in that second group, it's even worse: Those folks face 8-in-10 odds of losing their job to an automaton.
The White House and Ma are far from alone in predicting this threat to our very way of life.
Before you dismiss these staggering reports as fear-mongering - if you believe we'll keep creating new industries and jobs, as we did following the Industrial Revolution and other periods of upheaval - consider this.... In a recent interview, AI expert James Barrat told me that what we're about to see is unlike any of the innovations we've seen before.
"In history, technological advancement has not yielded a net loss of jobs. It never has," said Barrat, a documentary filmmaker and author of the 2013 book "Our Final Invention: Artificial Intelligence and the End of the Human Era." "AI is different. In history, innovation comes along in a kind of plodding way, and the cotton gin hits and revolutionizes an industry and displaces a bunch of workers - but they get retrained. AI, robots, and automation are going to be in every industry.
"Nothing will be preserved."
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He might be right...
That's why - first and foremost - I'm shoring up my own family's finances and encouraging my daughters to pursue "AI-proof" careers.
Second, I've prepared this report - for you.
Most people will likely survive this Jobless Future - whether through scraping together enough "gigs" to put food on the table or through measly government handouts.
But to me, mere survival isn't good enough.
And I bet you feel the same way.
You want to thrive - and profit - during the Jobless Future.
Here's how to do it...
But first, let's take a look at this technology - and just how quickly it could change the world.
"The information technology researchers at Gartner estimate that one-third of all jobs will be done by AI in 2025," Barrat told me. "And two Oxford University researchers published a study saying that 47% of the current jobs in the United States will be automated over the next 20 years."
And those alarming time frames might be optimistic. In a recent report, consultants at McKinsey contend that existing technology, including AI, could automate 45% of our paid work today.
AI refers to the development of computer systems capable of performing tasks that normally require human intelligence (visual perception, speech recognition, decision making, translation). AI will usher in changes in how we drive, shop, search the web, manage our productivity, discover medical advances, and manage our personal lives.
The Siri voice-bot from Apple Inc. (Nasdaq: AAPL) and the self-driving cars being developed by Alphabet Inc. (Nasdaq: GOOGL) are examples of AI technology you've likely seen or read about.
According to Tractica.com, the entire AI industry generated just $200 million in direct revenue just two years ago - but will grow by some 55-fold in roughly the next nine years.
And that explains why Silicon Valley leaders have been moving heavily into AI over the past few years - and why we want to do so as well.
AI can sharpen their game in many areas. For example:
AI's original missions - image classification, speech recognition, and language translation - are all becoming much sharper as well.
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Indeed, AI is set to take off because the costs of computing and data storage are both plummeting, while the computational capacity of today's processors continues to soar. At the same time, software engineers have made a stream of advances in sophisticated algorithms that are turning abstract concepts into tangible AI tools.
Those analysts at Tractica figure that AI will be an $11.1 billion business by 2024.
To make that happen, heavy investments are taking place right now. According to the Machine Intelligence Research Institute, as much as 10% of all computer science research and development is now focused on AI.
And big tech firms are hunting the industry's advanced startups.
Apple, for example, made an important AI acquisition that's set to boost Siri's prowess.
Emotient Inc., which Apple acquired in January 2016, has pioneered facial-recognition technology that detects a wide range of emotions. The system measures customer engagement to determine an ad viewer's feelings about what's being pitched. It also helps doctors measure pain levels in patients unable to express themselves.
Founded less than 10 years ago, Emotient mostly sells its tech to marketers, advertisers, and companies that want to know more about their customers.
Look for Apple to integrate Emotient into Siri, as well as dashboard interface CarPlay and its own marketing efforts.
Few companies are tackling AI as aggressively as Alphabet. In January 2014, in a move far ahead of its peers, the company spent $400 million to acquire British AI company DeepMind Technologies, which at the time employed 12 or so of the top 50 AI thinkers in the world.
The assembled talent is getting a helping hand from the legendary computer scientist and futurist Ray Kurzweil. He joined Alphabet team in 2012 after a four-decade career of inventing a set of AI breakthroughs.
There are a number of ways that AI can enhance Alphabet's existing businesses. Look for Google.com itself to become an advanced computing engine that can assess images, text, and sound in deeply contextual ways.
This so-called reinforcement learning involves getting computers to learn about the world even from very limited feedback.
More recently, Alphabet's various "moonshot" divisions are applying AI toward robotics, longevity treatments, and those self-driving cars.
When Facebook Inc. (Nasdaq: FB) bought virtual reality (VR) firm Oculus Rift for $2 billion in the summer of 2014, few people made the connection to AI.
But by late 2015, the connection became clearer. That same year, Oculus announced breakthroughs in using VR to identify objects in photos, understand natural language, make predictions, and create decision trees.
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Facebook's engineers clearly envision a future in which VR doesn't simply present a pre-written set of computer code, like today's video games. Instead, VR will be able to think for itself and eventually create environments and interactions that are every bit as real as the world around us.
Now, put that into a social-media space, where you and your friends interact. You can see what's on the mind of Facebook engineers.
The company has been ramping up its AI efforts since then and has since built up and established a fully equipped AI research lab.
Elon Musk, founder of Tesla Inc. (Nasdaq: TSLA) and SpaceX, is just one of many tech leaders who have cautioned the world about the dangers of AI.
In January 2015, Musk joined a team of scientists, researchers and academics - including Hawking and Apple cofounder Steve Wozniak - in issuing a collective warning.
In an open letter presented at the International Joint Conferences on Artificial Intelligence, they said a military AI arms race could soon develop if preventative measures are not taken as soon as possible.
Somewhat counterintuitively, since then Musk has teamed up with Y Combinator tech incubator founder Sam Altman to create billion-dollar nonprofit OpenAI... and then sharing its technology with everyone.
Giving away AI tech actually helps Musk compete against the likes of Alphabet and Facebook. Opening the tech up to everyone means that advances can come anywhere, not just OpenAI researchers.
And it helps Musk lure idealistic scientists from his competitors and jump-start AI development for Tesla's inevitable self-driving cars.
You're already seeing this "sea change" happen.
I know I have.
Consider all those self-checkout lines at hardware and grocery stores, restaurants, and sandwich shops. More and more often, you're plugging your order into an electronic kiosk and getting what you need with fewer people (i.e., jobs) involved.
Or maybe you worked at an auto plant where robots replaced workers on the line.
That's AI and automation at work.
That said, we're not talking about a world-ending scenario here.
Like I said, we're going to survive this.
But to thrive, we're going to keep on following the mantra I've long shared with folks: "The road to wealth is paved by tech."
And the bleakness of the Jobless Future doesn't change that.
Not a bit.
You can thrive from here on out by profiting handsomely from the very AI technologies that are threatening humanity's livelihood.
These rapidly developing technologies may be decimating the globe's work force, but they're also investment opportunities.
With that in mind, I've dug up three ways you can "play" the Jobless Future to create an outrageous fortune for yourself and the generations that will follow.
Let's take a look...
Even before its release, the Optane-branded SSD product from Intel Corp. (Nasdaq: INTC) fast became the talk of the tech press. Test releases showed unheard of speeds for similar drives available to consumers.
But when Intel wanted to make such a project a reality, it had to bring in knowhow from elsewhere, a much smaller yet brilliant company.
Intel needed some help to scale what's known as the "Memory Wall."
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Memory devices store dynamic data to make computers run faster and more smoothly. This is what allows you to open multiple windows on your web browser while you are working on a document, editing photos, and adding graphics to a presentation, all the while streaming music in the background.
However, most investors would think of chips, sensors, and computers as the mind behind it all.
And yes, all of these components are crucial for this field. But you see, without an ace memory platform, all these computing breakthroughs will find themselves blocked.
In other words, you'd be trying to put a fire hose of data through a straw.
To run at its full potential, AI needs memory hardware as much as perhaps anything.
When I think of companies scaling that wall, Micron Technology Inc. (Nasdaq: MU) always comes first.
Micron shocked the tech world in recent years with a huge breakthrough called 3D XPoint. The platform ushered in an entirely new way of looking at memory. Standard flash systems rely on transistors to store data. But 3D XPoint (pronounced "cross-point") deploys a microscopic mesh of wires that can be stacked on top of each other. These layers give memory its third dimension.
Micron Technology Inc.
Ticker: Nasdaq: MU
AI Focus: Micron’s 3D XPoint nonvolatile memory deploys a microscopic mesh of wires that can be stacked on top of each other. The result is a single system that can handle both memory and storage and that performs both better than what is out there today – and it will be a big boost to AI.
Market Cap: $53.51 billion
P/E Ratio: 7.23
52-Week Range: $22.64-$49.89
The result is a single system that can handle both memory and storage, and that performs both better than what is out there today. It's "nonvolatile" (NAND) storage, meaning it holds onto its data even when the power is off. And it runs 1,000 times faster than today's non-volatile flash memory approach.
Micron's 3D XPoint is the technology powering Intel's Optane.
I find it telling that Micron is working on this with a mega-cap firm that has remained at the sector's forefront for decades and is currently the world's largest producer. It's a big deal.
Intel's operating cash flow of is in the same ballpark as Micron's total market cap. The partnership is a great fit for Micron.
But it's not the only focus at Micron these days, nor is it the only place where XPoint is being used.
Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, believes XPoint could be a big boost to AI.
"It's a radical, different design that nobody has," Moorehead told Wired magazine. "Any artificial intelligence or object recognition you want to have on a device works a lot better with XPoint... The more you can put into that really fast memory space, the better your artificial intelligence is going to be."
To put it all in context, just look at what's up for grabs in Big Data alone. Entrepreneur predicts that the Big Data market will be worth $46.34 billion just by the end of the year - and businesses will be chomping at the bit to get a piece of that.
With spending set to rise by 14% a year through the end of this decade, the sector will be worth $67.5 billion. If memory just grabbed 2.5% of that total, we're talking a market worth nearly $1.7 billion.
And these may actually be too conservative estimates.
Micron boasts the world's broadest lineup of memory products, with more than 20,000 patents and operations in more than 20 countries around the world. The world needs Micron's products.
Also, Micron's improvement on fully diluted earnings in 2017 has been phenomenal.
Over the past year, Micron's stock has jumped from $23.24 in February 2017 to $46.50 per share today.
And it will keep running. In fact, I think we could see 40% gains over the next 12 months.
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President Donald Trump promises to create 25 million new jobs over the next decade with his economic plan. That plan is a good one - and will be very good for tech companies and their investors.
However, robotics and AI will eliminate tens of millions of jobs over that same stretch.
It makes many of us planning our retirement - trying to put together enough money and investments to guarantee that our "golden years" are prosperous - wonder how we'll do it. Moreover, it makes us worry about our children's and grandchildren's futures.
How can anyone save or invest if they're looking at a Jobless Future?
As we've been saying, one way to do it is to profit from the very automation technologies that are threatening humanity's livelihood.
And to do that, you have to "pick" the best stocks in this sector.
I've just spotted such a company - one whose technology could displace millions of "back office" workers in the coming years. You know, the folks doing data entry and handling the customer service lines.
Its technology is known as robotic process automation (RPA).
RPA uses software robots to replicate the actions of human workers for such tasks as data entry and customer service. RPA systems can dramatically improve the productivity of existing software applications across the board.
Companies that invest in this technology can supercharge the software tools they already own, giving them a nearly instant return on investment.
Researchers at Gartner call this a "gateway" technology and say it will affect a wide range of software systems - everything from logistics and resource planning to customer relationship management.
Pegasystems Inc.
Ticker: Nasdaq: PEGA
AI Focus: Pegasystems’ robotic process automation (RPA) technology uses software robots to replicate the actions of human workers for such tasks as data entry and customer service. RPA systems can dramatically improve the productivity of existing software applications across the board.
Market Cap: $4.08 billion
P/E Ratio: 95.45
52-Week Range: $40.25-$64.85
It's one of the fastest-growing segments of the $3.4 trillion global IT market, according to Gartner. And the field has already shown the ability to grow at 20% to 30% per quarter.
Pegasystems Inc. (Nasdaq: PEGA) wanted to jump to the top of the head in this space. So, in April 2016, it acquired RPA industry leader OpenSpan.
Founded in 2004, OpenSpan reported that its RPA tools were running on more than 200,000 desktops at leading firms around the world around the time Pegasystems gobbled it up.
Its RPA platform can make human agents much more productive, because it can...
The buyout rendered Cambridge, Mass.-based Pegasystems the single best way to play RPA's disruptive impact and ride huge sales growth.
Pegasystems stock price on the day it announced the acquisition (April 12, 2016) was $24.32, not far off its record. Exactly one year later, it traded at $44.50 per share - and now trades at $52.50. The market cap has also surged, up to over $4 billion.
Granted, investors already liked Pegasystems because its software targeting customer service and predictive analytics. Pegasystems has managed to involve itself in every major industry, including healthcare, finance and insurance, energy, manufacturing, and media. And its elite customer base includes most of the Global 500.
The company is on a 10-year streak of delivering double-digit sales growth while consistently beating forecasts. This is one of the most efficient companies in the field. Its gap diluted earnings more than doubled in 2017 and are growing 25% faster than its sales.
But it's never experienced a stock-price surge like this past year.
And that surge is far from over.
You can expect 40% gains through the end of the decade with this one.
There you have it... not one, but two strategic ways you can bolster your future in anticipation of time when 9-to-5 gigs are a precious rarity.
Instead of cowering before what tech billionaire Elon Musk calls "our biggest existential threat," we'll be building our fortitude - and our fortunes.
Get in on these plays now.
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