Nick’s Note: Regular readers know Jeff Brown as a Silicon Valley insider with the inside track on the biggest technology trends before they hit the front pages. He’s also the man who pinpointed the best-performing stocks of 2016 and 2018. So when Jeff unearths a big story, we share it with Daily readers.

Today, he shows why self-driving cars are no longer just the realm of science fiction—and reveals the piece of technology that will rewrite our world the way the internet did decades ago. Read on…

By Jeff Brown, editor, Exponential Tech Investor

Last October, a modified Toyota Prius drove itself 3,099 miles—from the Golden Gate Bridge in San Francisco to the George Washington Bridge in Manhattan.

There was a human in the driver’s seat. But he didn’t touch the steering wheel, gas, or brake pedals for the entire trip. The self-driving car drove itself the entire distance.

If any readers are curious, you can have a look at the time-lapse video of the entire coast-to-coast journey here.

Although the trip was the first of its kind, it got little to no press coverage.

But make no mistake, this is a remarkable achievement. This sort of trip wouldn’t have been possible even just a few years ago.

Today, I want to share with you the technology that made it possible—and show why it’s a trend that ought to be on every investor’s radar…

The Black Box

I remember when I first sat in a self-driving car. It was October 2011, on NASA’s Ames Research campus in Mountain View, California. The car was one of Google’s earliest versions of its self-driving technology.

It wasn’t pretty. The outside of the car was laden with large sensors, and the inside was packed front-to-back with computing equipment. There was barely enough room for someone to sit in the driver’s seat.

But only seven years later, the technology has progressed immensely.

The Prius I mentioned above that drove over 3,000 miles without human intervention was outfitted with only seven cameras. Six were positioned outside the car in order to provide a 360-degree view, and one was inside facing the driver.

Equally impressive was that the trip was made with only basic digital maps to work from. This is compared to the high-definition maps often used in self-driving vehicles, which are precise down to a few centimeters.

So what was the technology that enabled the self-driving Prius to make its cross-country trip? After all, it looked just like any other car.

The answer is simple… Hidden in plain sight in the back of the car was a black box. It looked something like this:

The secret hiding in the trunk

This black box is the key. It makes use of a special type of software that’s an essential part of self-driving cars. I’m talking about artificial intelligence, or AI.

Contained within that black box was an advanced system powerful enough to take in the data from the Prius’ cameras… use AI to analyze that data… and drive the car and passenger coast-to-coast safely.

At this point, you may be wondering what AI has to do with self-driving cars. But you see, the way autonomous cars will become dependable enough to function on public roads is through the use of AI.

As these cars drive, they produce a massive amount of data. Just one autonomous vehicle is estimated to produce roughly 4,000 gigabytes of information a day. (For perspective, the average high-definition movie has only four gigabytes of data.)

This data is then analyzed with AI and used to improve the car’s driving performance.

That’s what allowed the Prius to drive cross-country. The car “learned” how to drive safely by analyzing millions of miles of data. That’s why I say AI is the key to the success of self-driving cars. They simply can’t operate without it.

AI is what will ultimately bring self-driving cars to the masses.

And it’s not just self-driving cars. AI is becoming increasingly essential to our modern lives. In fact, you’ve likely used AI without even knowing it.

Everyday AI

Have you ever purchased something by communicating with Amazon Echo (Alexa)?

Have you ever asked Apple’s Siri to look up a fact from the internet?

Or maybe you’ve simply searched for something on Google…

If you’ve done any of these things, you’ve already used AI. All of these devices and services make use of AI.

And AI is becoming a necessity in modern business. Companies like Bloomberg, Walmart, and even Johnson & Johnson are using AI on a daily basis.

According to a November 2018 survey from McKinsey & Company, 47% of surveyed companies said they’d begun implementing AI into their businesses. In 2017, that figure was only 20%.

And according to a recent study by MIT’s Sloan Management Review, 85% of companies think AI will offer a competitive advantage.

There will soon come a time when AI won’t just be advantageous to companies—it’ll be a necessity. In the next few years, a company that fails to adapt AI into its business model will be akin to a company that doesn’t use the internet today. It will become obsolete.

You get an idea of just how essential AI is becoming to corporations by looking at the amount of money companies are willing to pay to acquire AI start-ups.

The increase in investment in the AI and machine learning (ML) industry over the last few years has been staggering. Just take a look at AI/ML acquisition values since 2015…

In 2015, there was only $2.6 billion worth of acquisitions in AI/ML-focused tech companies. By 2017, that number had increased by 7x to an incredible $18.4 billion.

Admittedly, 2017 was a bit of an outlier year due to Intel’s $15.3 billion acquisition of Mobileye. Mobileye is a major player in autonomous driving technology. And it uses ML for advanced driver assistance systems (ADAS), a precursor to self-driving cars.

More telling to me, however, is what happened next…

2018 saw $14.7 billion in acquisitions without any outliers like Mobileye. It represented 84% growth compared to 2016.

However, when I look at these numbers, the actual number of acquisitions is an even stronger indicator than their dollar values…

In 2018, we saw 241 individual acquisitions of AI/ML companies. That’s a 38% increase compared to 2017—and a nearly 5x increase since 2015.

I say that this is a stronger indication of activity because it’s a relatively new industry. There just aren’t that many large, $15 billion AI companies around to acquire. Most of the activity is in smaller, early stage companies that haven’t reached anywhere near $1 billion-plus valuations.

That means that incumbent technology companies that want access to AI technology and teams of engineers must go out and acquire these smaller companies.

All told, the revenue from the AI market was estimated to be $7.4 billion in 2018. But that figure is expected to grow to $89.8 billion by 2025. That’s a compound annual growth rate of 42%.

We’ve reached an inflection point with this technology. And we’re on the cusp of explosive growth. Few realize it, but in a matter of a couple years, AI will be as commonplace as the internet. We’ll look back and wonder how we got along without it.

AI won’t just improve upon today’s technology. It will reinvent it.

Regards,

Jeff Brown
Editor, Exponential Tech Investor

P.S. There’s another part of this story that I wasn’t able to include above. As I mentioned, AI will change our society just like the internet did two decades ago—and smart investors will make a fortune. But before AI and self-driving cars can go mainstream, one more piece of tech needs to be completed.

It’s not an exaggeration to say that the future of America’s economic dominance depends on it. Get the full story—and learn why this tech will be the biggest investment story of 2019—by watching this special presentation I just released.

IN CASE YOU MISSED IT…

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You’d never guess it, but this barren wasteland is one of the best investments of the past year—all thanks to this technology. And to find out more about the backdoor way you can profit from this tech, click right here…