I wanted to do a little write up on the AI sector. It’s fun and in everyone’s news feed right now. I wanted to focus on companies which develop and monetize AI technologies directly.

This isn't supposed to be a deep dive but rather a quick hits/highlights.

The 3 Big Boys Positioned to Eat Well at the AI Buffet

Artificial Intelligence is no longer just a buzzword - it’s big business. With OpenAI recently valued at $157 billion after its most recent funding round earlier this month…shits getting serious.

At this rate, the singularity will arrive before I finish writing this, and Teslabots will be presenting the next funding round press release (probably). 🤖

1.) NVIDIA: The Shovel Seller in the AI Gold Rush

Everyone knows the old saying, “In a gold rush, sell shovels”

Well, NVIDIA is selling the best shovels in town - in this case, the chips that make AI possible.

• GPU Dominance: NVIDIA’s graphics processing units (GPUs) are the workhorses of the AI industry. Once just for gamers and crypto miners, these chips power everything from self-driving cars to cutting edge medical research.

• Show Me the Money: In the last quarter alone, NVIDIA raked in a whopping $26.3 billion in data center revenue.

• Beyond Hardware: NVIDIA isn’t just about chips. Its CUDA platform is like the App Store for AI developers, ensuring NVIDIA stays at the heart of AI innovation.

Why they’ll win: As long as AI needs serious computing power (spoiler: it always will), NVIDIA will be cashing in.

2.) Alphabet (Google): The Data King with an AI Crown

Data is the new oil, and Google is sitting next to a lion on a couch in Saudi Arabia.

Here’s why Alphabet is primed:

• Data Advantage: Google processes over 8.5 billion searches per day, providing an unparalleled dataset for training AI models across diverse fields.

• TensorFlow Dominance: Used by over 60% of machine learning developers, Google's TensorFlow is the most widely adopted open-source AI framework.

• AI Momentum: Google Cloud, which includes its AI and machine learning services, generated $33.09 billion in 2023, growing to $9.57 billion in Q1 2024 alone (a 28% year-over-year increase)…It’s just getting started.

• Practical AI Breakthroughs: Google's DeepMind solved a 50-year-old challenge in biology with AlphaFold, an AI system that can predict the 3D structure of proteins. This breakthrough is accelerating drug discovery and could lead to cures for diseases like Alzheimer's and cancer. In 2022, DeepMind open-sourced this technology.

Why they’ll win: With unmatched data resources and a finger on every AI plate, Google is playing chess while others are still learning checkers.

P.S. - I also think Tesla and Meta is in a similar boat as google on data… but thats for another time. 🦾

3.) Microsoft: Bringing AI to the Corporate Boardroom

Microsoft might seem like your companies ol’ tech stack, but it’s proving that you can teach an old dog new tricks.

• Azure’s AI Arsenal: Microsoft's cloud platform, Azure, is like a Swiss Army knife for businesses and startups looking to use AI. It makes AI accessible to companies, big and small.

• Office Space, But Smarter: Microsoft is making all of corporate America smarter and more efficient.
  
  Imagine an AI assistant for every Office app. That’s Microsoft 365 Copilot, turning boring spreadsheets into organized data goldmines.
  

• Strategic Alliance: Microsoft's $13 billion investment in OpenAI has already paid dividends, integrating GPT-4 into Bing search and GitHub Copilot. This partnership gives Microsoft exclusive cloud provider rights for OpenAI, positioning Azure as the go-to platform for enterprises looking to leverage cutting-edge AI models.

• Show Me the Money (Again): While exact AI revenue is hush-hush, Microsoft’s cloud services, which include its AI offerings, grew by 22% last year. That’s a lot of businesses betting on Microsoft’s AI future.

Why they’ll win: Microsoft is turning its massive business customer base into an AI goldmine, one office meltdown at a time.