Five AI Stocks US Politicians Have Been Buying

Artificial intelligence (AI) is a hot investment theme right now. This year, both retail investors and institutional money managers have been piling into AI stocks, pushing the share prices of companies such as Nvidia, Microsoft, and C3.ai up significantly. Not wanting to miss out on the action, politicians have been investing in the space too. With that in mind, here’s a look at five popular AI stocks and the politicians that have been buying them this year.

Why AI Stocks Are Rising

Artificial intelligence is nothing new. Believe it or not, the technology has been in development since the early 1950s. However, ChatGPT – which has racked up hundreds of millions of users worldwide since its launch last November – has been a total game-changer in terms of exposure. All of a sudden, it has become very clear to us all that AI is going to have a hugely disruptive impact on the world in the years ahead. As a result, everyone is talking about the technology at present.

Source:  Bloomberg

Is AI Regulation On Its Way?

Given the speed at which AI is moving right now, regulators are behind the curve here. However, there is a good chance that we will see AI regulation introduced at some point in the not-too-distant future.

Back in April, the Biden administration announced that it was seeking public comments on potential accountability measures for AI systems due to their potential impact on national security and education.

“Responsible AI systems could bring enormous benefits, but only if we address their potential consequences and harms. For these systems to reach their full potential, companies and consumers need to be able to trust them,” said Alan Davidson of the National Telecommunications and Information Administration at the time.

More recently, on May 16, the US Senate held a hearing on regulating AI, with a focus on ChatGPT. Here, Sam Altman, the CEO of ChatGPT creator OpenAI, suggested that the US government should focus on safety requirements before and after testing, and work with other governments to agree on a common approach to licensing and auditing AI models. Meanwhile, Christina Montgomery, Chief Privacy & Trust Officer at IBM, argued for regulation that is risk-based and use-case-focused. She also called for rules to inform people when they are interacting with an AI system.

It’s worth noting that the US government has posted a Blueprint for an AI bill of rights. This has identified five principles that should guide the ‘design, use, and deployment’ of automated systems in order to protect the American public in the age of AI.

So, while there is no AI regulation in place in the US right now, there is certainly movement under the surface. As a result, we can expect to see interesting developments in the regulatory space in the months and years ahead. How the US regulates AI will most likely set the tone for global AI regulation.

A ‘Picks-And-Shovels’ Play On AI

Zooming in on AI stocks, one that has been very popular with politicians this year is Nvidia (NVDA:US). It’s a classic ‘picks-and-shovels’ play on the AI theme as its accelerated computing processing hardware – which is designed specifically for AI applications – is used by nearly all of the major players in the AI space, including OpenAI, Google, and Microsoft. According to HSBC, Nvidia has a 90% market share in the generative AI chip space.

Nvidia is already seeing impressive results from its investments in AI. In the company’s recent Q1 results, the company said that thanks to strong demand for its AI products, it is expecting revenue of around $11 billion for Q2 – around 50% above Wall Street’s forecast. This sent its share price up more than 20%, pushing the company’s market cap to nearly $1 trillion.

"The computer industry is going through two simultaneous transitions — accelerated computing and generative AI. A trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service, and business process. Our entire data center family of products — H100, Grace CPU, Grace Hopper Superchip, NVLink, Quantum 400 InfiniBand and BlueField-3 DPU — is in production. We are significantly increasing our supply to meet surging demand for them," spoken by Nvidia CEO Jensen Huang.

Politicians that have purchased Nvidia stock this year include: 

• Kathy Manning
• Daniel Goldman
• Jonathan Jackson
• Tommy Tuberville
• Josh Gottheimer
• Morgan McGarvey
• Ro Khanna

The largest trade was from Democrat Jonathan Jackson, who bought between $15,000 and $50,000 worth of stock in mid-April.

An Investor in ChatGPT

Another tech company that has been getting attention from politicians is Microsoft (MSFT:US). It’s an obvious play on the AI theme as it has invested over $10 billion in ChatGPT owner OpenAI.

Recently, Microsoft has made some notable moves in the AI space. Not only has it launched Bing Chat, a chatbot-based version of its Bing search engine service, but it has also been injecting its ‘Copilot’ AI assistant into its applications. Many investors believe that these new AI-powered services could help the company capture market share from Google.

Politicians that have purchased Microsoft stock this year include: 

• Kathy Manning
• Daniel Goldman
• Josh Gottheimer
• Ro Khanna
• Michael Burgess 

The largest purchase was from Democrat Josh Gottheimer, who made several seven-figure buys in mid-February.

Using AI Across Its Business

Big Tech stock Amazon (AMZN:US) has also been snapped up by a number of politicians recently. It has been using artificial intelligence technology across its business for many years now. For instance, it uses technology to recommend products to customers based on their past purchases and browsing histories. It also uses it within its warehouses, to optimize the placement of products.

However, recently, it has stepped up its AI offerings. For example, earlier this year it launched a new service called ‘Bedrock’. This allows customers to build their own ChatGPT-like generative AI tools. It believes this has the potential to improve “virtually every customer experience”. Additionally, Amazon has pledged to bring ChatGPT-style AI to its Alexa-powered gadgets.

Politicians that have purchased Amazon stock this year include:

• Daniel Goldman
• Ro Khanna
• Michael McCaul
• Morgan McGarvey
• Dan Sullivan 

The largest buys were from Republican Michael McCaul, who made several $50,000 - $100,000 purchases in early February.

A Leader in AI 

Of course, we can’t talk about AI and not mention Google owner Alphabet (GOOGL:US). Over the last decade, it has made dozens of AI-related acquisitions, including that of the UK’s DeepMind – the company was able to beat the game Go using artificial intelligence. As a result, it is one of the biggest players in this area of technology today.

In recent months, many investors have been concerned that ChatGPT could have a negative impact on Google’s revenues. Brad Gerstner, CEO and Founder of Altimeter Capital, is a good example here. He recently sold his Alphabet stock on the back of fears that ChatGPT has secured a ‘leadership position’ in search and AI.

“They’ve breached the Google moat,” he told CNBC. “200m people now treat ChatGPT a verb as synonymous with discovery in the age of AI,” he added.

However, Alphabet has come out fighting. Recently, it announced that its own AI-powered chatbot, Bard, has had major upgrades and is now available for everyone to use. It also advised that Google Search is getting a major update called ‘AI snapshots’. So, the AI race isn’t over yet.

Politicians that have purchased Alphabet stock this year include: 

• Daniel Goldman
• Josh Gottheimer
• Ro Khanna
• Dan Sullivan
• Bill Keating 

The largest trade was from Daniel Goldman, who bought between $50,000 and $100,000 worth of stock in late January.

A Unique Play on AI

Finally, electric vehicle (EV) manufacturer Tesla (TSLA:US) has also seen notable buying from politicians in 2023.

Tesla offers a unique way of playing the AI theme. As an automotive company, it’s a very different business from the Big Tech companies. However, it is still very active in the AI space. For example, AI plays a major role in Tesla’s autopilot system, helping the system make decisions about how to control the vehicles. Tesla also uses AI to develop over-the-air updates for its EVs and to identify potential defects in parts before they are used in vehicles.

Politicians that have purchased Tesla stock this year include:

• Daniel Goldman
• Ro Khanna
• Dan Newhouse
• Josh Gottheimer
• Tommy Tuberville

The largest buy was from Daniel Goldman, who made a $100,000 - $250,000 trade-in early March.

Final Thoughts

Looking at the trading activity here, it seems that US politicians are no different from other investors when it comes to interest in AI stocks. Like retail and institutional investors, they are keen to capitalize on the AI revolution.