Two minutes with… Chris Ford, manager of the Smith & Williamson Artificial Intelligence Fund

In this edition of two minutes with, we put Chris Ford, fund manager at Smith & Williamson, centre stage.
You are the manager of the recently launched Smith & Williamson Artificial Intelligence Fund (Ai). How would you define artificial intelligence?
Officially there is no academic definition of artificial intelligence, as the very nature of AI is massively complex and rapidly evolving. For the purposes of the fund we would define AI as the following:
Artificial intelligence seeks to synthesise, automate and optimise the process of converting information into useful and actionable knowledge.
Why have you launched the fund now?
The world is changing rapidly – self-driving cars may have seemed a very unlikely prospect just a few years ago, but they are here now and their development will have a profound impact on industries well beyond autos. For example, if your business relies on charging hefty insurance premiums to human drivers who are prone to expensive prangs when parking at the supermarket, you may find that such drivers switch to self-driving cars – which are much safer than the average human driver and which cannot therefore be subject to the same hefty insurance premiums. Self-driving cars don’t have to be perfect, they just need to be better than humans – and because they don’t get drunk at the wheel or sleepy or involved in road rage incidents, they already are. Self-driving cars could also help older citizens stay mobile and maintain their independence – a huge benefit in the many societies where populations are ageing.
Why does any of this matter? We believe that we’re at a turning point in respect of the adoption of artificially intelligent systems, and the implementation of these systems within the economy will have a meaningful and substantial impact on the way in which we live our lives. They will also change the way in which we think about growth rates within the global economy and where that growth is to be found.
What makes your fund different to technology or robotics funds?  
The point of our fund is to provide clients with purity of revenue exposure to what we believe to be one of – if not the – fastest growing element within the global economy.
A traditional technology fund will be somewhat hidebound within the specific sector that it is designed to address. By contrast, the very nature of the broad application of artificially intelligent systems presents a huge breadth of opportunity right across the economy, much of which will be out the purview of a traditional technology fund. There are opportunities to be found in the consumer discretionary sector, in consumer services, healthcare, industrials, energy and within financial services in particular. Companies in these sectors will be investible in only small scale for a traditional tech fund, because they are not classified as technology stocks.
Robotics is an interesting expression of artificial intelligence. You can think of a robot as an embodiment of an artificial intelligence. AI is the enabling technology that sits behind the robots in which a robotics fund would look to invest. Robotics is, of course, only one slim vertical of the broader opportunity to apply artificially intelligent systems across the economy. Other examples might be cyber security or automated driving or automated triage for healthcare services. Many of these sit firmly outside of the scope of a robotics fund.
And you see active management as the best way to invest in AI?
Artificially intelligent systems will change where growth in the global economy is to be found. There will be AI winners but there will be losers too. That is why we think an active approach will be important.
You use an artificial intelligence platform to help you manage the fund. How does that work?
A crucial differentiator of our fund is that we have AI embedded in our research process – in essence, rather than employ an army of analysts to grind their way through company reports, we use AI to help us find artificial intelligence applications within companies. AI is faster and more thorough than any human could be, and unlike human analysts, AI never gets tired and the quality of the output is always improving.
Why do you feel the UK, and in particular London, is the ideal place from which to run a fund investing in artificial intelligence?
In our view, London has a key role to play in the adoption of artificial intelligence. DeepMind is based in London and they are owned by Google. We have Europe’s largest biotechnology research lab recently opened in the Crick Institute. We have the Turing Institute at the British Library which looks to bring together the universities of Oxford, Cambridge, London, Bristol, Edinburgh and Warwick in one place in a large research hub, adjacent – not coincidentally – to Google’s DeepMind campus. Amazon and Microsoft have very large AI teams based in Cambridge. The network effects that one might traditionally associate with Silicon Valley in respect of traditional technologies are now beginning to accrue in London within the artificial intelligence space.
To find out more about the Smith & Williamson Artificial Intelligence Fund, visit the Smith & Williamson website.