CIBC Tech & Innovation Market Update – June 2024

Google released the company’s new AI search engine, AI Overviews. Despite Google recently emphasizing the company’s cautious approach to integrating generative AI technology with the world’s most used search engine, Google’s AI search feature still has some glaring bugs. Within days of its public release, users began to report a series of errors and factually incorrect responses. Locked in an AI arms race and competing for market share, it appears some of the tech giants may be sacrificing quality in favour of speed, which has the potential to lead to adverse results.

According to our analysts, 2024 will represent year two of a three-year recovery for the Canadian technology sector. Timing of rate cuts and the macro environment, we expect to play critical roles in the recovery. So far, parts of the sector have experienced a relatively slow start to the year amid an uncertain demand environment. Further the Canada’s once-leading position as an AI research hub is set to be re-invigorated and broadened as the sector gets earmarked in the 2024 Federal Budget.

It felt as though the market briefly took a trip back to 2021 mid-May after GameStop shares traded up as high as 119% based on a single tweet posted by Keith Gill (a.k.a. Roaring Kitty), the infamous central figure of the 2021 meme stock frenzy. The tweet itself consisted of a single meme (an image of a man sitting up in his seat) and made no reference to a particular stock, but the return of Roaring Kitty to social media was enough to send GME and other meme stocks such as AMC Entertainment soaring. Rising interest rates had cooled the meme stock craze over the last two years, and until now, Mr. Gill’s twitter account had been silent since his 2021 testimony to Congress. These moves have left many wondering if Roaring Kitty’s return to social media is a signal that retail traders are eyeing struggling companies and heavily shorted stocks once again.

As we creep closer to many election dates around the globe, AI deepfakes are becoming more and more convincing and more of a concern for discerning voters. With at least 83 elections taking place worldwide in 2024, the need for tools to help identify fact versus fiction has never been greater. This week, OpenAI announced that the non-profit has developed a tool designed to detect AI-generated content. While not yet available to the public, OpenAI stated Tuesday that it will be releasing its detection classifier to a group of disinformation researchers to test it on real-world situations. Experts have been warning for months that AI-generated image, audio and video content have the potential to influence elections; whether we will have the tools to identify them in time remains to be seen.