One of the most compelling attributes of the artificial intelligence (AI) investment thesis is the utility of AI across other industries and technologies.
That could be an indication that the future is bright for exchange traded funds, such as the WisdomTree Artificial Intelligence and Innovation Fund (WTAI). WTAI debuted last December and follows the WisdomTree Artificial Intelligence & Innovation Index.
Something for investors to consider regarding WTAI is that as AI evolves, its applications expand across industries. These days, AI is an essential element in a variety of disruptive concepts, including but not limited to e-commerce, healthcare innovation, and the internet of things.
AI could also play a vital role in the mining industry, helping companies more efficiently locate metals, meaning that AI could also play an integral role in the expansion of clean technologies and renewable energy.
“Geologists have a limited capacity to digest rich data provided by the new generation of exploration, including various fields of science such as geophysics, hyperspectral imaging, geochemistry and minerology,” says Christopher Gannatti, WisdomTree global head of research. “Properly calibrated machine learning techniques can be used to detect patterns that indicate the best chances for the presence of certain types of ore—like lithium, copper, nickel or whatever might be desired.”
This is important because, as just two examples, electric vehicles and wind farms are significantly more minerals-intensive than internal combustion engine vehicles and traditional power plants.
Further supporting the case for AI at large and WTAI in particular as plays on the clean technology revolution is pure demand. As more car buyers embrace EVs, lithium demand will surge. As more homeowners opt for solar, demand for minerals used to produce solar panels will trend higher. That puts a burden on miners to effectively and safely locate more of the necessary metals and minerals.
“It can take more than 10 years for new mines to become operational after companies receive different rights and permits,” adds Gannatti. “Discovering the best possible place to explore can also take significant time. Most of the easily identifiable high-grade deposits have already been found, and investment in exploration has been declining. A rough rule of thumb is that for every 100 sites evaluated, one will turn up a profitable deposit. It’s possible that in recent years the actual figure is closer to one in 1,000.”
Bottom line: The mining industry is ripe for disruption, and AI could lead that move.
For more news, information, and strategy, visit the Modern Alpha Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.