Are You Ready to Fall in Love with AI? Investing in Our Increasingly Lonely Lives

6 min read

We are living increasingly lonely lives. If you can feel it without relying on any hard data, your feelings are real and valid. In the United States, for example, the share of adults between the ages of 25 and 54 years who were married has declined from 67% to 53% since 1990, while the share of adults who were unpartnered has increased from 29% to 38% (see Reference 1 and Picture 1 below). 

We can be emotional when discussing this topic, but there are many reasons behind this shift: economic, social, technological, historical, and even biological. Furthermore, the family as an institution has always been undergoing various transformations. And today’s “traditional” nuclear family became the dominant family structure only during the 20th century (see Reference 2 below). 

Would you like to live in an extended family together with your parents and siblings, their spouses and children, your aunts, uncles, cousins, nieces, and nephews? For the current emotionally fragile generation of young people who strive to create so called “safe spaces” to digest personal experiences, this would probably seem like a plot from a horror movie. But this was how we were living throughout most of human history.

So now we have this long-term shift away from the nuclear family. Accordingly, the lives of people living in this new reality will also change. Can we take advantage of this social change? To succeed we need to understand what we can expect from this new world. Some signs indicate that some trends have already been developing for some time, while others are just starting to emerge.

So, what can we expect?

1) The demand for small living spaces is likely to increase. With the individualization of family life, there will be no practical need to have large houses or apartments. Investors may therefore view smaller housing solutions and alternatives as more promising from a long-term perspective. Such investments can be made either by directly purchasing small houses or apartments, or by buying specialized real estate investment funds, for example, apartment income REITs.

2) People will try to stay fit, regardless of whether they are in a long-term relationship or not. This is important, if you want to support your physical and mental health as well as your labor productivity. But this is also important for maintaining your value in the dating and marriage market (see Reference 3 below). This implies that the beauty industry and cosmetic manufacturing as well as the fitness industry (sports equipment and clothing, fitness clubs and sports courses, etc.) may be viewed as an interesting investment proposition. Quite probably, providing remote beauty and fitness services – for example, online makeup and skincare courses or online workout classes – may become a new trend. In fact, this trend may be already in the making. The global cosmetics market alone is projected to grow by 5% annually from 288 billion US dollars in 2021 to 415 billion in 2028. The sportswear market will rise by 6.6% annually during the same period, reaching $268 billion in 2028 (see Reference 4 below). At the same time, the US Conference Board expects the global economy to expand at an average annual rate of around 2.5 percent in the period from 2023 to 2031. There is a wide range of investment opportunities in these segments, including both individual publicly traded companies as well as sector and industry exchange traded funds.

3) People will explore various ways of meeting potential romantic partners. Since the individualization of human life and relationships is going mainstream, it becomes increasingly difficult to meet your partner through friends or family members. The rise of domestic and international migration complicates things even further. Workplace romances are discouraged by most companies. Some failed attempts at workplace dating can be even considered “sexual harassment”. That is why companies providing dating services are likely to be a good investment opportunity. The global online dating application market alone is expected to grow by 5.5% annually between 2022 and 2030 (see Reference 5 below). This trend has been going on for some time now. There are certainly much fewer publicly traded dating companies compared to the beauty or fitness industry. But you can still find various available investment alternatives.

4) Living a lonely life and having children later in life will lead to an increasing demand for artificial insemination and fertility treatments. This also implies a rising demand for egg, embryo, and sperm collection and storage. This trend has been observed for some time now, while some countries, for example Denmark, have been successfully exploiting it as an excellent business opportunity (see Reference 6 below). Describing the search process for potential Danish sperm donors, the BBC correspondent noted that “selecting a potential father for your children, it turns out, is not unlike shopping online.” You can select a donor according to your height, weight, or eye color preferences. For a fee, you can also download an audio interview and a photograph of him as a baby.

The world’s largest sperm bank Cryos International in Denmark says it has 450 registered donors and is exporting sperm to more than 80 countries. The Danes are very proud of this “achievement”, claiming that “this is a Viking invasion, exports from Denmark are beer, Lego and sperm.” (see Reference 7 below). In 2021, the global sperm bank market size was 5.28 billion US dollars. It is expected to grow at an average annual rate of 4.8% in the period from 2022 to 2030, reaching 8.11 billion US dollars (see Reference 8 below). Related industries – egg banks, artificial insemination, and surrogacy services – can be expected to experience rapid growth too. 

5) Now it’s time to discuss an even hotter topic: “sinful” investments. According to Investopedia (see Reference 9 below), this category includes gambling, the production and sale of alcohol, tobacco, and weapons. The same category includes erotic goods and services. It is often considered inappropriate to publicly address this topic, while real-world experience tells us a very clear story: this market is booming. For example, let us consider the production and sale of sex toys, a very traditional market segment. In 2021, its global market size was 30.48 billion US dollars. It is also projected to grow at an average annual rate of 8.4% between 2022 and 2030 (see Reference 10 below). Investors can find many publicly traded companies in this category, including such sex industry “icons” as Playboy, Hustler, or RCI Hospitality Holdings, an adult club operator.

6) However, the most promising field is still likely unavailable to mass-market investors: in our politically correct times it can be called sexual wellbeing. Some experts believe that the adult industry, in general, is one of the engines of technological progress (see Reference 11 below). This industry, for example, was one of the early adopters of high-resolution images and videos, video streaming, and online payment solutions. This pushed users to upgrade to better connections and equipment.

Now we are witnessing the rise of new emerging trends such as immersive virtual reality shows, video-linked physical stimulation, social sex video-sharing platform to promote good sexual values and behavior, wearable devices and sex toys for individuals with certain physical disabilities, ethical porn platforms for couples to improve their sexual wellbeing, applications for men to control premature ejaculation and many other “exciting” things. Some Las Vegas hotels are expected to launch a new service for their guests by delivering virtual reality porn headsets. The headsets will be delivered by robots. The service fee is 50 US dollars (see Reference 12 below). Even the good old Playboy has recently opened a new virtual Playboy Mansion in the metaverse.

The most interesting thing is that mainstream media outlets no longer hesitate to write about this topic (see Reference 13 and 14 below). In 2020, the famous Consumer Electronics Show in Las Vegas allowed sextech companies on the show floor for the first time ever (see Reference 15 below).

Somewhat amusing incidents also happen. For example, the British government has recently become a shareholder in Killing Kittens, a sex party organizer known for its exclusive and hedonistic events, under a scheme set up during the pandemic to help innovative firms. The company claims to have 180,000 members. It also continues to expand its adult social network, and plans to grow in other markets, including the United States. The company’s CEO says that its current market value amounts to 15 million pounds (16 million US dollars), compared to 10 million pounds in 2019 and 5 million pounds in 2018. Thus, it is claimed that the UK government has already made money by helping the company in difficult times (see Reference 16 below).

7) Finally, we can explore a certain idea that can materialize in the not-too-distant future. We know that more and more people are living alone. This may create demand for a virtual family life. I think many will agree that single people often turn on the radio, TV, or podcasts to create a family noise environment. What they would really need are more advanced versions of AI virtual assistants they could chat with over dinner, watch a movie, or discuss weekend plans. Furthermore, scientists have been claiming for some time now that they know how and why people love each other by understanding the neurochemical pathways that regulate social attachments (see Reference 17 below). Some excited minds even imagine a future where love is guaranteed because it will be provided chemically or genetically. Thus, perhaps, at one point in the future a couple of pills will help you fall in love with your AI assistant.  

If this shift towards an individualized, digitized, and virtualized family life frightens you, don’t worry! If this model proves economically, socially, emotionally, and biologically unviable, it will be eventually replaced by some new family structure. Since history, in one way or another, tends to repeat itself, maybe one day you will find yourself living under the same roof with your mom and dad, your granny, your “big” brother and “little” sister, their spouses, your auntie as well as several cousins, nieces, and nephews. Are you ready for this “happy” family reunion? Possibly falling in love with your AI assistant is not so nightmarish, after all.

Picture 1. 

Are You Lonely Tonight?

References:

1.  “Rising Share of U.S. Adults Are Living Without a Spouse or Partner”, Richard Fry and Kim Parker, Pew Research Center, 5 October 2021.

2.  “Happily Unmarried: Embracing Our Increasingly Lonely Lives”, Olegs Jemeljanovs, medium.com, Be Yourself, 20 october 2022.

3.  “Physical Activity and Socio-Economic Status of Single and Married Urban Adults: A Cross-Sectional Study”, Daniel Puciato, Michał Rozpara, National Library of Medicine, 9 November 2021.

4.  “Cosmetics Market Size, Share & Covid-19 Impact Analysis”, “Sportswear Market Size, Share & Covid-19 Impact Analysis”, Fortune Business Insights, 2021.

5.  “Online Dating Application Market Size, Share & Trends Analysis Report”, Grand View Research, 2022.

6.  “Business Booms for Danish Sperm”, Paul Henley, BBC News, 20 May 2011.

7.  “Facing Shortage, British Sperm Bank Tells Men: ‘Prove Your Worth’”, Reuters, 1 September 2015.

8. “Sperm Bank Market, By Service Type, By Donor Type, By End-Uses, and by Region Forecast to 2030”, Emergen Research, August 2022.

9. “Sinful Investing: Is It for You?”, reviewed by Thomas Brock, Investopedia, 1 May 2022.

10. “Sex Toys Market Size, Share & Trends Analysis Report”, Grand View Research, 2022.

11. “Porn Can Still Be an Engine of Tech Progress”, Leonid Bershidsky, Bloomberg Opinion, 2 September 2021.

12. “Las Vegas Hotels to Deliver VR Porn Headsets via Robot to Lonely Guests”, Ariel Zilber, The New York Post, 4 July 2022.

13. “Next-Generation of SexTech Entrepreneurs Is Here, Disrupting the $37 Billion Sexual Wellness Market”, Marija Butkovic, Forbes, 10 June 2021.

14. “Playboy’s Metaverse Vision Can Double the Stock Price”, Jim Osman, Forbes, 29 November 2021.

15. “CES Allows Sex Tech on Show Floor for First Time and This Seattle Startup CEO Wonders What Took So Long”, Taylor Soper, GeekWire, 7 January 2020.

16. “UK Treasury Takes a Stake in Sex Party Planner Killing Kittens”, Daniel Thomas, The Financial Times, 27 June 2022.

17. “I Get a Kick Out of You”, The Economist, 12 February 2004.

Olegs Jemeljanovs, PhD, CFA A seasoned professional in the field of financial markets, investments and economic analysis with the crucial mix of private and public sector experience (large international lenders, private boutique banks, ministry of finance, central bank, financial regulator). Able to cover macroeconomic and microeconomic trends, short-term market moves and long-term economic cycles, the role of biology and psychology in finance. Have held both front-office, sales and analytical positions. If you want complex economic, financial, political, historical, sociological and psychological concepts to be explained in a simple and accessible way then you have certainly found the right website. If your consider the sense of humor to be important then you have definitely found the right man.

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