Deep learning may sound like a flight of fancy from a classic sci-fi novel, but it is actually a powerful problem-solving tool. With it, people can use computers to reach a richer understanding of complex situations and pinpoint areas that demand a thorough investigation. Let's unpack this helpful concept to give you a better understanding of why it matters to your investment portfolio.
Deep learning: The basic facts
Deep learning is an advanced branch of artificial intelligence (AI) and, more specifically, a type of machine learning. These systems rely on neural networks to find patterns in seemingly chaotic data.
A neural network is a computer program modeled after how the human brain works. The analysis starts with a matrix of data nodes, similar to the neurons of a brain. The connections between nodes are adjusted through a long series of trial-and-error testing.
Seeing the nodes in action is kind of like watching a baby taking its first steps, gaining confidence and stability from every mistake. The more data a deep learning system processes, the better it becomes at understanding that data and making predictions.
What's the big idea?
What's the big idea?
So, why should deep learning be on your radar? Picture this: You have a sophisticated system that can process, make sense of, and use vast amounts of data to accurately predict outcomes as the data points change. From self-driving cars and tailor-made online shopping to high-tech health diagnoses, deep learning is on track to revolutionize our world -- and for you, the investor, the trailblazers could make for a rewarding venture.
Don't mistake it for a passing fad. Deep learning is an evolution. Remember when the internet started to reshape business and commerce? Deep learning might not cause the same level of disruption, but its potential to boost innovation is significant. It sits right up there with generative AI and natural language processing.
Navigating deep learning as an investor
Navigating deep learning as an investor
So, you've got the lowdown on deep learning and its importance. But how does it fit into your investment strategy?
First, keep your eyes peeled and your ears open. Know which companies are pouring cash investments into deep learning tech -- from the largest tech titans to the fledgling start-ups and even unexpected, old-school businesses.
For example, every automaker is developing self-driving systems nowadays, and deep learning plays a crucial role in making these systems work. Retail giants like Walmart (WMT 0.83%) and Target (TGT -1.32%) use deep learning analysis to plan marketing pushes and manage their supply chains. And when banks flag suspicious transactions in their day-to-day money flow reviews, deep learning likely helped them find the attempted fraud.
Secondly, don't forget the flip side of the coin. Yes, the growth potential is juicy, but so are the risks. Data privacy, bureaucratic red tape, and the complex nature of the tech itself all pose significant challenges.
Remember, investing in deep learning isn't about simply picking a company with "AI" in its tagline. You'll want to dig deeper into their business structure, leadership, and financial status, just as you would for any investment.
Related investing topics
Example
Google: The deep learning trailblazer
Alphabet (GOOG 0.51%) (GOOGL 0.54%) and its Google arm have been superstars of deep learning for many years. You'll find neural networks behind the Google Translate service, the auto-tagging functions of Google Photos, the navigation routes of Google Maps, and the basic search results from the eponymous search engine.
When the Google DeepMind team created AlphaZero -- the strongest chess engine of 2017 -- the system used deep learning techniques to build a near-unbeatable collection of strategies from nothing but the basic rules and 24 hours of automated game-playing.
The company combined its deep learning and AI development teams in the spring of 2023. The merged group has more resources and a deeper talent pool than the two separate teams of old. Google is now working on "the next generation of AI breakthroughs and products" in this segment. Alphabet investors are eagerly awaiting this next wave of world-changing breakthroughs.
Deep learning, while complex and still evolving, holds many intriguing possibilities. As investors, it's important to understand these emerging trends. Remember, machine learning is a special type of AI, and deep learning is an even more specific method within the machine learning space. You just zoomed in on an ultra-powerful niche within a niche here.
Time and technology are always moving forward, and as the wheels of innovation continue to turn, our understanding of these fascinating developments should keep pace.
