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When Reality Overtakes The Hype – Investing in Artificial Intelligence

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March 16th, 2022


Themes, Learning


Alexander Antic

Artificial intelligence is changing the world. It affects how we interact with companies, how we build computers, and even how we wage war.

“If you invent a breakthrough in artificial intelligence, so machines can learn, that is worth 10 Microsofts.”
– Bill Gates, Founder of Microsoft

With developments in both hardware and software set to continue over the coming years, the scale of the artificial intelligence revolution is only just beginning to be felt – not least for investors. This short piece will give you a quick introduction to the topic and then introduce a way to obtain exposure to Artificial Intelligence through, what we believe, is the first thematic private markets portfolio in Switzerland.

Artificial Intelligence Doesn’t Stop Making The Headlines

Artificial intelligence, or AI, hit the headlines in the second quarter of 2021. The Beijing Academy of Artificial Intelligence set a new record for the number of parameters within a language model, pushing the boundaries of what AI can be expected to achieve. The bar was also raised financially, with Q2 of 2021 being the record-breaking third quarter in a row for VC deals in the sector, at USD 31.6 billion[1]. This heavy VC interest has led to impressive financials at start-ups, including platform providers Databricks, which has raised a total of USD 1.9 billion since 2013, Samsara, which has raised USD 930 million since 2015, and Datarobot, which has surpassed USD 100 million in revenue in just ten years[2].

Three Business Areas Where AI Is Already A Game-changer

Three of the most promising areas for AI deployment are natural language processing (NLP), semiconductors, and intelligent robotics. NLP’s uses include chatbots and automated survey analysis, with more than 30% of companies already using these services. As mentioned above, the conversational AI market, which consists of chatbots, is growing at a 75% CAGR, driven by contact-center-as-a-service use cases.

Nvidia – Much More Than Just A Gamer’s Dream Graphics Card Manufacturer

AI and Machine Learning (ML) models require top-flight computational power and, by extension, specialist semiconductor chips to function. The established market leader in this space, Nvidia, has seen 79% year-on-year growth for its data centers in Q2 2021, with the total market size for semiconductors now north of USD 60 billion[3]. Nvidia isn’t the only mover in this area, though – AI chip-manufacturer start-up SambaNovaSystems lately became the most valuable AI chip company outside China with a USD 678 million Series D round backed by SoftBank.

Intelligent Robotics As A New Frontier

AI and ML are the bedrock of intelligent robotics, which encompasses AI and ML systems that enable robots to be deployed without human input. This sub-sector is forecast to grow to USD 18.3 billion by 2024 with a CAGR of 13.5%, fueled by computer vision and perception improvements. Intelligent robotics is of particular interest in the logistics space, with both Ocado and Amazon acquiring early-stage firms (Kindred AI and CANVAS technology, respectively) in this domain. Alongside commercial uses, intelligent robotics has also piqued the interest of the defense community: recently, Anduril, a start-up developing AI-enabled drones for military purposes, raised a USD 450 million Series D round[4].

Introducing the Disruptive Technologies Late-Stage Thematic Portfolio (DTP)

AI is only one of several high-growth areas on Stableton’s radar. In addition to Artificial Intelligence, Stableton’s thematic basket is expected to feature some of the world’s most disruptive technologies such as Blockchain, Internet of Things, Robotics, Space Tech, and the Metaverse. Through the portfolio, investors are expected to gain access to a unique combination of themes, companies and advanced technologies that have already proven their potential to re-shape traditional industries and are expected to create significant value going forward. What makes this portfolio particularly unique is that there is validated co-investor interest: In addition to identifying sub-themes we deem high potential through our proprietary research, we asked our investor community to confirm their thematic preferences. This can translate to attractive opportunities that are more likely to materialize.

Contact Stableton Or Sign Up To Explore Our Investment Opportunities

In the past, accessing the opportunities such as the Disruptive Technologies Late-Stage Thematic Portfolio (DTP) meant seeking early access through venture capital funds (which, once well-established, might not even be interested in your commitment). In addition, it involved high investment minimums, cumbersome paperwork, scarce information (often not even knowing what you will be investing in), and long holding periods. Today, there is an alternative. Accessing promising businesses via late-stage investment and pre-IPO investments is increasingly popular. For one, investors know the name of the company they are investing in. Secondly, as in the case of DTP’s target portfolio companies, who are the respective market leaders in their fields, the product-market fit has already been established, and the path to profitability is clear. To hop on an investment at this stage means a lot of upside potential, while the risk level stays relatively moderate. Stableton is Switzerland’s leading provider for access to late-stage venture capital & pre-IPO Investments to smaller qualified investors. Our mission is to help investors get access to the otherwise secluded private investment market. With a minimum of CHF 10’000, this type of investing should be considered as part of a portfolio. This article only scratches the surface of the opportunities late-stage VC and pre-IPO investing present. Contact your Stableton representative now to learn more and find out about opportunities that exist right now.

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