Opportunities and risks of AI from the perspective of sustainable investments

Long-term risks in focus - discrimination and data misuse current problems

However, for Sandra Wachter, a professor at Oxford University who researches artificial intelligence, this focus falls short: "We focus far too much on the long-term risks of artificial intelligence and overlook (among the many benefits that AI offers) the fact that such technologies are already being used in a discriminatory, data-abusing way and at the expense of environmental protection". Areas where AI makes important decisions about people, such as whether someone gets a job, can get health insurance or is deemed creditworthy, are particularly problematic, she said. "If groups of people have been disadvantaged here in the past, then this is reflected in the training data from which the AI learns. This perpetuates the disadvantage. We therefore urgently need state regulation and also the awareness of the users for these misdirections," says Wachter.

AI Act - Europe is on the right track, but needs tightening up

For Sandra Wachter, who is involved in an advisory role in the drafting of the AI Act of the European Union, the EU's path is the right one: "It is important that Europe leads the way here and takes the initiative before technological development overtakes us all," says the scientist. She also finds much to like in the AI Act's content: "For example, risk categories have been considered for certain areas of life and defined where a particularly high level of protection is needed – for example, in the world of work or in the administration of justice. However, there are still gaps. This applies above all to legal protection and participation rights, which play a major role in environmental protection. Wachter: "It is not too late. We can still make improvements. But we have to create awareness.”

Artificial intelligence as a growth driver

For Günther Schmitt, too, artificial intelligence is playing an increasingly important role. As head of "Equities, developed Markets" at Raiffeisen KAG, he also manages a theme fund dedicated to megatrends. According to Schmitt, artificial intelligence now plays a role in almost all megatrends and of course in many other areas as well, regardless of whether this concerns technology, demographics, health care or sustainability. AI has become an important growth driver. "Globally, up to 1.3% of GDP growth is due to artificial intelligence. This applies in particular to the developed markets, but increasingly also to the emerging markets, even if this technology is not yet as widely used there," says Schmitt. The opportunities of artificial intelligence are therefore also clearly emerging for investments. There are already strong trends on the stock markets with regard to AI. For example, the share price of Nvidia, the global market leader in AI computing, increased by around 260 % last year.

Engagement: proactively address sensitive issues

The effects of artificial intelligence on the labour market, as mentioned by Sandra Wachter, are also easily recognisable for investors. The automation potential through artificial intelligence is around 25 %. According to Schmitt, this mainly concerns legal positions and positions in the administrative sector. Less affected are the construction and maintenance sectors, where artificial intelligence unsurprisingly hardly threatens jobs. "Automation and jobs are very explosive from a social point of view and also for us as an ESG investor an aspect that we address and question as part of our commitments," says Schmitt. In general, dialogue with companies in connection with artificial intelligence is essential. This is because you can proactively address sensitive topics such as data protection, discrimination or liability issues and also demand improvements. In any case, state regulation is welcome because it also creates standards in terms of ethics, says Schmitt.

Achieving individual SDG targets with the help of artificial intelligence

A critical approach to artificial intelligence is appropriate, but one should not ignore the positive developments that artificial intelligence can promote. For example, AI can contribute significantly to achieving SDGs 1, 3, 4, 6, 13 and 14. "In the medium to long term, AI can also contribute as a positive trigger for ESG transformation. After a critical analysis and appreciation of the negative factors or dangers, we still see artificial intelligence as a topic that brings more benefits than harm to the environment and society overall," says Schmitt.

AI on the stock market: great potential with equal risks

Despite the risks mentioned, progress in the field is likely to continue at a rapid pace. Artificial intelligence has the great potential to change our society in the long term. Those who bet on the right companies and technologies can achieve correspondingly large profits on the stock market. However, especially in such a fast-moving technology sector, developments can occur very abruptly at any time that turn the playing field upside down. Supposedly sure winners in the sector could then abruptly find themselves on the losing side. Continuous and careful observation of the market and good company selection by the fund management are therefore essential

This text is intended for media representatives. Despite careful research, the information contained therein is for non-binding information purposes only, is based on the knowledge of the persons entrusted with its preparation at the time of its preparation and may be changed by Raiffeisen Kapitalanlage GmbH at any time without further notice. Past performance is not a reliable indicator of a fund's future performance. The contents of this document do not constitute an offer, a recommendation to buy or sell, or an investment analysis.

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