Artificial intelligence has dominated the news and investors’ minds.
The launch of ChatGPT, an artificial intelligence platform developed by OpenAI, took the world by storm. ChatGPT reached 100 million users faster than any other application.
Back in January, Microsoft invested $10 billion in OpenAI.
And just days ago, another AI startup, Cohere, was close to securing $250 million in funding.
The backers include such software titans as Nvidia and Salesforce.
While ChatGPT works in the consumer space, Cohere is focused on the enterprise.
AI startups are choosing their niches and markets.
And investors need to understand what areas in AI could potentially be the most beneficial for them.
Let’s take a look.
#1 Machine Learning
As a reminder, machine learning is a branch of AI that gives computers the ability to learn without being explicitly programmed.
The biggest application of machine learning (or ML) is efficiency and cost-cutting.
Businesses use ML to drive down their expenses, improve quality control, optimize their supply chains, and allow for better decision-making using large amounts of data.
Nvidia, the company that produces graphics cards for gaming, is also a leader in ML hardware. Its graphics cards are perfectly suited for the type of algorithms and calculations that ML requires.
Machine learning is one of the fastest-growing AI markets. It was valued at $21 billion in 2022, and it could be worth over $209 billion by 2029, an 895% increase.
Investors should pay attention to the companies developing ML hardware and software. But they also should be aware of the companies that use or plan to use ML in their operations.
Machine learning could drive efficiency and increase profitability. It’s one of the biggest trends in AI, and it is poised to get even bigger in the coming years.
#2 Robotic Process Automation
AI-driven robotic automation is another booming area.
It’s projected to grow to $24 billion by 2030.
And it’s been called “the next industrial revolution.” The first one allowed for mass production using human labor. The next one could take human input out of the process.
This will improve accuracy and drive down costs. AI-enabled robots could also learn how to optimize all sorts of processes, from document turnover at financial companies to production management at manufacturing facilities.
And the constant feedback loop between monitoring production using sensors, feeding that data into AI algorithms, and improving the production process is completely automatic. It happens by itself 24/7.
ABB, one of the world’s largest robotic companies, announced that it would partner with an AI startup to supply robots for the distribution and e-commerce sectors.
Manufacturing, supply chains, and logistics are some of the largest markets for robotic process automation.
#3 Generative AI
Generative AI is one of the hottest trends in artificial intelligence.
It is a technology that allows human-like communication and creative decision-making.
It has already made inroads into medicine, art, law, business, and other areas.
Generative AI is exactly the space that companies like OpenAI and Cohere work within.
But you need to understand this as an investor…
Pursuing the most well-known names in the AI area might not be the best idea.
Instead, doing your own due diligence on companies working in other areas, such as food manufacturing, logistics, or e-commerce, that have started to integrate generative AI into their processes could be a great first step.
This is what the “smart money” does. Sophisticated investors take into account the world’s biggest trends and try to find the next company that will leverage them before everybody else.
Here at the Financial Star, we’re following these trends on your behalf.
And as far as AI goes, we hope that this short list clarifies for you the areas you need to focus on to find the next opportunity.
Thank you for your loyal readership,
The Financial Star team