It's only February, but for those following the technology industry, this year has already been dominated by artificial intelligence (AI). It seems to have happened overnight -- like the flick of a switch -- following the surging popularity of OpenAI's ChatGPT conversational platform. 

But in actuality, some of the world's largest tech giants have been working on AI for years and so have some of the most exciting start-ups. 

Ark Invest makes a big call

Cathie Wood's Ark Investment Management has a history of betting big on emerging technologies through its exchange-traded funds (ETFs), and it just revealed one of the most bullish calls on the AI industry that Wall Street has seen so far.

In Ark's "Big Ideas 2023" report, it detailed a path for AI to add $200 trillion to economic output by 2030 by exponentially increasing the productivity of the world's knowledge workers -- those in professional roles like engineering, science, law, and information technology. 

The firm says the cost of training language models (like ChatGPT) will fall by 70% per year between now and the end of this decade, which could increase the output of a typical software engineer tenfold. 

But the technology is having an incredible impact even today. For example, Ark's research suggests that generative AI can create a graphic design in under one minute for just $0.08, compared to five hours and $150 for the human equivalent. By extrapolating those savings across to other industries, it becomes easy to understand Ark's bullish stance for AI in the broader economy. 

Some of the biggest potential winners in this AI arms race can be invested in today. Here's why Tesla (TSLA 2.03%), Upstart (UPST 7.99%), and Microsoft (MSFT -0.25%) are among the best AI bets you can make right now. 

1. Tesla

Most people don't think about Tesla as an AI company, but the technology is woven through everything it does. Tesla just came off a record-setting 2022 with 1.3 million electric vehicle (EV) deliveries, and I would rate the stock a buy based on its current financial success alone. 

But the EV industry isn't the only area where this company holds a leadership position. It has developed arguably the most advanced self-driving software in the world, which could power a fleet of fully autonomous robotaxi vehicles in the future. That's actually a big reason Ark Invest thinks Tesla stock could soar 636% from here to $1,533. 

Tesla has also given investors an early peek at its Optimus humanoid robot, which it says will be available for sale in 2027. It could change the manufacturing industry forever by filling unskilled jobs currently occupied by human workers, which would lead to a major productivity boost. Imagine the economic benefit derived from factories that could run around the clock with minimal human input. 

Tesla stock has tumbled 48% amid the recent sell-off in the technology sector, so this could be an ideal long-term buying opportunity. Investors get a slice of the world's leading EV producer in the short term and gain exposure to the upside potential of the company's AI initiatives over the longer run. 

2. Upstart

Of the three stocks I'm putting forward, Upstart carries the most risk. Unlike Tesla and Microsoft, Upstart is still in the early stages of its journey and it's certainly having teething problems. In fact, its stock has plunged 95% from its all-time high. But if the company turns things around, there's a multitrillion-dollar addressable opportunity available for the taking. 

The company has developed an AI model that could transform the lending industry. For over 30 years, banks have relied on Fair Isaac's FICO scoring system as the primary measure of creditworthiness, but FICO only accounts for a handful of metrics when contributing to a lending decision. Upstart says this leads to biased, unfair, and even inaccurate assumptions about the quality of a borrower.

Upstart's algorithm instead assesses 1,600 data points, and thanks to AI, it can do so in a matter of minutes. It actually makes a lending decision instantly about 82% of the time. This workload would take human assessors weeks or even months, so it's a prime example of the productivity gains driven by AI that underpin Ark's bullishness. 

While Upstart stock is heavily beaten down right now, it has recently made improvements to its business that should reap results in the coming quarters. But the greatest gains -- assuming the company can return to growth and appropriately control credit risk -- will be realized over the long term.

3. Microsoft

I opened this piece with a nod to ChatGPT because that platform's progress has underpinned much of Ark Invest's optimism. In 2019, Microsoft invested $1 billion in its creator, OpenAI, and it just announced a follow-up investment of a rumored $10 billion. It's becoming clear that this will set up the next growth phase across Microsoft's business. 

The company has already integrated OpenAI with its Azure cloud services platform, which provides its business customers with access to ready-made language and generative AI models. Azure is currently the fastest-growing part of Microsoft's business, and the company said that its machine learning segment within Azure has doubled its revenue in five consecutive quarters. It highlights the rapidly growing demand for AI-driven technologies. 

But the real game-changer could be Bing, Microsoft's search engine that currently holds a meager 3% global market share. It's trying to unseat Alphabet's Google Search, which has 93% share, and it believes ChatGPT is the answer. 

By integrating the conversational model with Bing, Microsoft is revolutionizing how we access information online. According to Appfigures, Bing's mobile application attracted 750,000 downloads in the week following its integration with ChatGPT -- almost as many as the 800,000 downloads it had in 2022. 

The path to dominance won't be straightforward, but since Ark's financial predictions rely heavily on the further development of language models, Microsoft appears to hold the early advantage in the AI arms race.