The increased usage of Artificial Intelligence on personal devices is also called “On-Device AI,” or “ODAI.” It refers to devices like smartphones, or wearables like a smartwatch, that use Artificial Intelligence technology themselves, without sending data to a central server via the internet where it would then get processed. If we use ChatGPT, for example, prompts are not dealt with on the device level, but rather on the servers of the company behind ChatGPT, OpenAI.

More and more players want to offer better on-device solutions for Artificial Intelligence tasks, as this has several (potential) advantages:

• The time lag between input and output could be shorter, as data can be processed locally and does not need to be transferred over wide distances.

• Artificial Intelligence tools would be available even without any connection to the internet, e.g. in remote areas or during times when internet service providers experience service disruptions.

• If data is processed on the device itself without being sent to any central server, the risk of data leakage is lower. For use cases with a lot of sensitive data, this is an important advantage of on-device Artificial Intelligence technology.

• Processing data on the respective device itself instead of transferring it over vast distances could be more energy efficient. Since high electricity demand is one of the key issues for Artificial Intelligence today, finding more energy-efficient solutions is an important task for Artificial Intelligence researchers and developers.

Some On-Device AI offerings include smart doorbells that can recognize who stands in front of a door and automatically send notifications or open doors, smartwatches that have built-in algorithms to scan the wearer’s data for potential health risks, or Artificial Intelligence-powered driving assistance technology that helps drivers by breaking automatically etc.

How Can Investors Benefit from Increased Usage of Artificial Intelligence on Personal Devices?

Investors can benefit from the growth of Artificial Intelligence on personal devices in different ways. Buying a device maker that offers such solutions is possible, but it is hard to estimate which of these consumer-facing companies will ultimately win out in this still relatively young and fast-changing market. Some smartphone companies that offer on-device AI tech could benefit, for example, but it is also possible that it turns out that a competitor’s product is better or more innovative.

Investors can also invest in the companies that power the Artificial Intelligence personal devices trend: These are mainly the tech and semiconductor companies that sell to a wide range of customers, so they can benefit from broad market growth and are not too dependent on a single product working out well.

Broadcom (NASDAQ: AVGO) is one such semiconductor company that should benefit from broad growth in the on-device Artificial Intelligence market. Broadcom has vast experience in designing chips for smartphones and other personal devices, and it is expanding in the AI space via deals with companies, such as Apple (NASDAQ: AAPL).

Qualcomm (NASDAQ: QCOM) is another semiconductor company with vast experience in the personal device and smartphone space. It has connections with consumer hardware producers and has been working on AI chips for some time, and a recent cooperation with Microsoft (NASDAQ: MSFT) for AI PCs positions them well for further growth in this industry.

Investors can also choose from among some of our best Artificial Intelligence picks to benefit from increased Artificial Intelligence usage on personal devices.