ESG Investors Are Growing Anxious Over Blowback In The AI Sector

ESG Investors Are Growing Anxious Over Blowback In The AI Sector

ESG investors and fund managers invested heavily in big tech since they are low-carbon alternatives with high returns. However, they are getting increasingly anxious over too much experimentation with AI in the sector. Experts believe that due to big tech’s exposure to AI, there is a short-term risk for those investors.

Marcel Stotzel, the portfolio manager at Fidelity International, expects to get an AI Blowback. He explained that in such situations, there can be a meaningful market decline due to an expected trigger in the marketplace. If just one incident goes wrong, the material impact on the market could be quite high.

Stozel said that it could be concerning for fighter jets with self-learning AI systems. Fidelity International is among the ESG fund managers that are talking about safety features in AI systems. Stotzel added that there needs to be a “kill switch” if AI systems somehow go rogue in a dramatic manner.

According to Yahoo Finance, “The ESG investing industry may be more exposed to such risks than most, after taking to tech in a big way. Funds registered as having an outright environmental, social and good governance objective hold more tech assets than any other sector, according to Bloomberg Intelligence.”

Furthermore, tech dominates the biggest ESG-traded fund in the world. Some companies here include Microsoft, Amazon, Apple Inc., and Nvidia Group. These companies are also at the forefront of AI development.

In addition to that, there are also tensions over the direction of the industry in the near future. Moreover, there are also concerns regarding the speed with which the development of AI will occur. This is the concern of the public as well.

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A passionate writer and an avid reader, Soumava is academically inclined and loves writing on topics requiring deep research. Having 3+ years of experience, Soumava also loves writing blogs in other domains, including digital marketing, business, technology, travel, and sports.


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