AI Analysis Report

19.04.2023
Dao Hoang Khang
Contents:

Contents:...................................................................................................................................... 2
I. Introduction...............................................................................................................................3
II. AI And AI Market Overview..................................................................................................... 4
1. AI overview and SWOT analysis......................................................................................... 4
2. AI industry, market size, growth rate, and key players........................................................ 6
a. AI industry and market.........................................................................................................6
b. AI key players...................................................................................................................... 7
III. AI Trends................................................................................................................................. 9
1. Analysis of current and emerging AI trends of the market:..................................................9
2. Discussion of the impact of AI on various industries..........................................................11
IV. Key AI Companies................................................................................................................ 15
1. Analysis of the performance of leading AI companies.......................................................15
2. Overview of recent mergers and acquisitions in the AI industry........................................ 18
V. Investment Opportunities..................................................................................................... 20
1. Analysis of the investment potential of the AI industry...................................................... 20
2. Discussion of the risk factors associated with investing in AI............................................ 21
3. Overview of the top AI investment opportunities, including public companies, private
companies, and emerging startups........................................................................................22
VI. Conclusion And Recommendation.....................................................................................24
1. Summary of the key findings of the report......................................................................... 24
a. SWOT Analysis:.................................................................................................................24
2. Discussion of the future outlook for the AI industry........................................................... 25
3. Recommendations for investors considering investing in AI............................................. 26
References................................................................................................................................. 28
 I. Introduction
The purpose of this report is to provide a comprehensive overview of the AI market, analyze
current and emerging AI trends, and provide recommendations for investment opportunities in
the AI industry. The report begins with an overview of the size and growth rate of the AI market,
and key players in the industry. It then analyzes the sub-markets within AI, including machine
learning, natural language processing, computer vision, and robotics. The report also examines
the current state of AI adoption across industries and discusses the impact of AI on various
sectors.

Furthermore, the report provides an analysis of current and emerging AI trends, including
technological advancements and their potential applications. It also discusses the performance
of leading AI companies, the competitive landscape, and recent mergers and acquisitions in the
AI industry. Based on this analysis, the report provides recommendations for investment
opportunities in the AI industry, including public companies, private companies, and emerging
startups. Finally, the report concludes with a summary of the key findings and future outlook for
the AI industry, as well as recommendations for investors considering investing in AI.
 II. AI And AI Market Overview

1. AI overview and SWOT analysis

a. AI definition:

AI, or artificial intelligence, is a broad term that refers to the simulation of human intelligence
in machines that are programmed to perform tasks that would typically require human intelligence.
This can include tasks such as recognizing speech, making decisions, or solving problems. AI
systems can be trained using data to learn and improve over time, allowing them to perform tasks
with increasing accuracy and efficiency.

Generative AI is a specific subset of AI that refers to algorithms that are capable of

generating new, original content, such as images, text, or music, that has not been directly copied
from existing data. Unlike other types of AI, which are designed to recognize and analyze patterns in
existing data, generative AI is designed to create new data that resembles the patterns it has
learned. Generative AI often involves the use of deep learning algorithms that can learn complex
patterns in data and generate new data that resembles those patterns.

AGI, or artificial general intelligence, refers to the hypothetical ability of AI to understand or

learn any intellectual task that a human being can. Unlike current AI systems, which are designed to
perform specific tasks or solve specific problems, AGI would be capable of adapting to any task or
problem, similar to how humans can learn new skills or solve new problems. AGI is often seen as
the next step in AI development, and some researchers believe it could potentially lead to the
development of artificial superintelligence, or ASI
In natural language processing (NLP), large language models (LLMs) are transformer-based
neural networks that predict the most likely text to follow. The number of parameters in an LLM
determines its performance by indicating the factors it considers when generating output. NLP is an
AI technology that enables machines to understand human language, including colloquialisms and
pronunciation, and produce human-like dialogue and text. By using algorithms to extract natural
language rules, NLP can convert unstructured language data into a format that computers can
interpret, improving results for voice search queries and other applications. Since 2020, NLP
systems have advanced in their ability to understand sentiment and intent, generate human-like text,
and describe images using language.
There are 2 main kinds of Machine Learning Model that has been used recently to create
the LLMs that are supervised machine learning and unsupervised machine learning:
● Supervised Machine Learning: In supervised machine learning, a model is given data
that is labeled in an organized fashion by a subject matter expert. In figure 2, which
shows an example of supervised learning, one might provide pictures of cats with the
label “cat.” Once enough structured and labeled data is provided, the AI model built can
recognize and respond to patterns in data without explicit instructions. The output and the
accuracy of supervised learning algorithms are easy to measure. Supervised learning is a
common method of machine learning today.
● Unsupervised Machine Learning: A model is given data that are not labeled in an
organized fashion. For example, one might provide pictures of animals (cats, dogs, etc.)
without any labels. The model organizes items into logical groupings based on patterns
recognized by the model. This method is used to identify underlying patterns from
previously unstructured data. The expectation is not to derive the right output but to
explore datasets and draw inferences. Unsupervised learning is often applied to cases
where the researcher or user does not already know the significant structures or
relationships among the data. Figure 3 depicts this approach to learning.

As the amount of data being generated continues to grow exponentially, there is a pressing
need for AI to analyze and interpret this vast amount of information to achieve desired outcomes. AI
has the ability to learn and improve over time through the use of algorithms and can quickly process
vast amounts of data to identify patterns and insights. With the development of more advanced AI
systems, there is potential for even more complex data analysis and decision-making. As new
data-heavy applications emerge, such as holograms, metaverse, brain computer interfaces, eVTOL
aircraft, and quantum computing, the role of AI in data processing and interpretation is likely to
become increasingly important.
2. AI industry, market size, growth rate, and key players
a. AI industry and market
AI usage is exploding in facial and voice recognition technology, medical diagnostics, algorithmic
trading, and automated customer service bots. For many companies, gaining an edge with AI
requires ongoing investments in compute, networking and data center infrastructure.
According to Accenture, AI could double the annual global economic growth rates by 2035 and is
likely to drive this in three different ways. First, AI will lead to a strong increase in labor productivity
(by up to 40%) due to automation. Second, AI will be capable of solving problems and self-learning.
Third, the economy will benefit from the diffusion of innovation.
According to a study by PwC, the global economy could potentially benefit from AI by up to $15.7
trillion by 2030, while open data - data that is available to everyone - has the potential to generate
$3.2-5.4 trillion in economic value annually by reducing emissions, increasing productivity, and
improving healthcare, as noted by McKinsey. IDC predicts that the AI market, which includes
software, hardware, and service sales, will see a compound annual growth rate (CAGR) of 19%
between 2022-2026 and surpass $900 billion by 2026 (as shown in Exhibit 2).

The combination of big data and AI is expected to double the gross value-added growth rates of
developed markets by around 2035 and increase global productivity growth by 0.8-1.4 percentage
points in the long run. In addition, over half of the benefits of the Big Data ecosystem could be
captured as consumer surplus and public benefits, rather than corporate profits.
 b. AI key players
Currently, the AI industry has several key players, including:

● Google: Google has made significant investments in AI, particularly in natural language
processing, computer vision, and deep learning. Google's AI technology is used in products such as
Google Search, Google Assistant, and Google Translate.
● Microsoft: Microsoft has developed a wide range of AI technologies, including natural
language processing, computer vision, and speech recognition. Its AI technology is used in products
such as Microsoft Office, Bing, and Cortana.
● IBM: IBM has been a leader in AI research for many years, and has developed AI
technologies such as Watson, a question-answering system that can understand natural language.
IBM's AI technology is used in industries such as healthcare, finance, and retail.
● Amazon: Amazon has invested heavily in AI, particularly in natural language processing and
machine learning. Its AI technology is used in products such as Amazon Alexa, Amazon Prime, and
Amazon Web Services.
● OpenAI: OpenAI is a research organization focused on developing safe and beneficial AI. It
has developed several high-profile AI models, including GPT-3, a large language model that can
generate human-like text.
● NVIDIA: NVIDIA is a leading provider of graphics processing units (GPUs) that are widely
used in AI applications. Its hardware is used to accelerate deep learning algorithms and is used in
industries such as healthcare, automotive, and finance.

All AI firms in the market can be classified based on its function in the AI ecosystem as follow:

● AI Platforms: These companies provide tools and platforms that enable other businesses to
build and deploy AI applications
● AI Software: These companies develop and sell AI software applications that can be used for
specific tasks or functions.
● AI Hardware: These companies design and manufacture hardware specifically for AI
applications, such as specialized processors or sensors.
● Robotics: These companies focus on developing robots that use AI technology to perform
various tasks, such as manufacturing or logistics.
● Natural Language Processing (NLP): These companies focus on developing AI algorithms that
enable computers to understand human language and respond appropriately.
● Computer Vision: These companies focus on developing AI algorithms that enable computers
to interpret visual data, such as images and videos.
● Autonomous Systems: These companies focus on developing AI systems that can operate
autonomously, without human intervention.

Here are the table listing some example of key players in each type of company
 Category Example Companies

AI Platforms Google Cloud AI Platform, AWS AI Services, IBM Watson

AI Software UiPath, Blue River Technology, Nauto

AI Hardware NVIDIA, Intel, Graphcore

Robotics Boston Dynamics, Rethink Robotics, ABB Robotics

Natural Language Processing

OpenAI, Baidu, Amazon Alexa
(NLP)

Computer Vision Clarifai, DeepMind, Mobileye

Autonomous Systems Waymo, Tesla, Blue River Technology

 III. AI Trends

1. Analysis of current and emerging AI trends of the market:

According to a report conducted by PwC, AI has the potential to contribute $15.7 trillion to the
global economy by 2030, which exceeds the current output of China and India combined in 2017. Out
of this amount, $6.6 trillion could be from increased productivity, while $9.1 trillion could be from
consumption-side effects. Although some markets and businesses are more advanced than others,
AI has passed the early stages of development while becoming more popular due to the popularity of
. This presents opportunities for emerging markets to surpass their more developed counterparts.
Furthermore, even today's start-ups or yet-to-be-founded businesses in your sector could benefit from
AI.
 North America China

● North America has the potential to ● The high proportion of Chinese GDP
experience a significant uplift in GDP from manufacturing increases the
from AI. potential benefits of implementing
● This is due to the opportunities to more productive technologies.
introduce more productive technologies ● It may take time to build up the
that are already available for necessary technology and expertise to
implementation. implement these capabilities, resulting
● The gains will be accelerated by the in a slower GDP boost compared to
advanced technological and consumer the US.
readiness for AI. ● However, within around ten years,
● Rapid accumulation of assets, including productivity gains in China could
technology, data touchpoints, and surpass those of the US.
customer insights, will further amplify the ● A higher rate of capital reinvestment
gains. within the Chinese economy
● North America is expected to see the compared to Europe and North
fastest boost in the next few years. America contributes to the value
● While the impact will still be strong from potential of AI in China.
the middle of the 2020s, it probably won’t ● AI will play a crucial role in the shift to
be quite as high as in the earlier years. a more consumer-oriented economy
● One of the main reasons for this is that as and the move up the value chain into
productivity in China catches up with more sophisticated and
North America, it will stimulate exports of high-tech-driven manufacturing and
AI-enabled products from China to North commerce.
America. ● China's surge in AI patents filed
demonstrates the focus and
investment in AI.
● Talent development in areas such as
analytics will be critical to realizing the
potential benefits of AI in the Chinese
economy.

What is the impact of generative AI?

Generative AI’s impact on business and society is expected to be enormous. As its capabilities
expand, generative AI’s reach and its ease of use makes it more democratic.
With generative AI, developing and deploying new AI capabilities is no longer limited to data
scientists, and thus, solutions can be both business and citizen-led. And, the resulting speed and
productivity that generative AI brings to knowledge work can save time and money, allowing people to
focus on higher-value activities. The coming explosion in AI use can allow organizations to transform
their business — so long as they manage the new risks to security, privacy, bias, ethics and brands.

What is GPT and GPT-4?

ChatGPT is a chatbot created by OpenAI that produces human-like text and is openly accessible
to the public. Previously, AI could read and write text but could not comprehend it. However,
generative AI models like ChatGPT have changed this by enabling machines to understand human
language and create human-like dialogue and content. ChatGPT's ability to generate human-like text
has a wide range of applications, such as content creation, data extraction, text summarization, web
optimization, language translation, and even computer programming. Programmers are already
utilizing this technology to generate programs or explain code and concepts. Since its release in
November 2022, ChatGPT has gained a lot of attention, with one million users within just five days.
To put this in perspective, it took Netflix 3.5 years and Instagram 3 months to reach this milestone.
On the other hand, GPT-4 is the new language model which is multimodal. That means it accepts
text, speech, images and video as inputs for processing making its potential become outstanding
compared to the traditional language model like GPT.

2. Discussion of the impact of AI on various industries

AI now can be used as a service for each firm to perform specific task based on their dataset and
training model. With the combination of Probabilistic programming can use the incomplete
information that’s so common in business. Hybrid learning adds probabilistic approaches to deep
learning so it can work with uncertainty. That opens the door to better analyses of market behavior,
the regulatory environment, and more.

a. Healthcare
AI-based diagnostics utilize a patient's personal medical history as a benchmark, and any slight
variations can indicate a potential health issue that requires further attention and treatment. Initially,
AI will probably be integrated as a supporting tool for human physicians, rather than a substitute. It
will complement the doctors' diagnoses and, in the process, furnish crucial insights for the AI system
to continually learn and advance. The ongoing interaction between human physicians and
AI-powered diagnostics will amplify the accuracy of the systems and eventually instill enough trust for
humans to assign the responsibility entirely to the AI system to operate independently.
Addressing privacy and protection concerns regarding sensitive health data is essential. Due to
the complexity of human biology and the requirement for further technological development, some of
the more advanced applications may take time to achieve their potential and gain acceptance from
patients, healthcare providers, and regulators.

b. Automotive
Autonomous fleets would enable travelers to access the vehicle they need at that point, rather
than having to make do with what they have or pay for insurance and maintenance on a car that sits
in the drive for much of the time. Most of the necessary data is available and technology is
advancing. However, businesses still need to win consumer trust.
Technology still needs development – having an autonomous vehicle perform safely under extreme
weather conditions might prove more challenging. Even if the technology is in place, it would need to
gain consumer trust and regulatory acceptance.
c. Financial Services
While human financial advice is costly and time consuming, AI developments such as
robo-advice have made it possible to develop customized investment solutions for mass market
consumers in ways that would, until recently, only have been available to high net worth (HNW)
clients. Finances are managed dynamically to match goals (e.g. saving for a mortgage) and optimize
client’s available funds, as asset managers become augmented and, in some cases, replaced by AI.
The technology and data is in place, though customer acceptance would still need to increase to
realize the full potential..
d. Transportation and Logistics
Autonomous trucking reduces costs by allowing for increased asset utilization as 24/7 runtimes
are possible. Moreover, the whole business model of transport & logistics (T&L) might be disrupted
by new market entrants such as truck manufacturers offering T&L and large online retailers vertically
integrating their T&L.
Technology for autonomous fleets is still in development.
e. Technology, Communications and Entertainment
We already have personalised content recommendation within the entertainment sector. Yet there
is now so much existing and newly generated (e.g. online video) content that it can be difficult to tag,
recommend and monetise. AI offers more efficient options for classification and archiving of this huge
vault of assets, paving the way for more precise targeting and increased revenue generation.
Cutting through the noise when there is so much data, much of it unstructured.
f. Retail
Instead of being produced uniformly, apparels and consumables can be tailored on demand. If we
look at fashion and clothing as an example, we could eventually move to fully interactive and
customised design and supply in which AI created mock-ups of garments are sold online, made in
small batches using automated production, and subsequent changes are made to design based on
user feedback.
Adapting design and production to this more agile and tailored approach. Businesses also need to
strengthen trust over data usage and protection.
g. Manufacturing
Self-learning monitoring makes the manufacturing process more predictable and controllable,
reducing costly delays, defects or deviation from product specifications. There is huge amount of
data available right through the manufacturing process, which allows for intelligent monitoring.
Making the most of supply chain and production opportunities requires all parties to have the
necessary technology and be ready to collaborate. Only the biggest and best-resourced suppliers
and manufacturers are up to speed at present.
 IV. Key AI Companies

1. Analysis of the performance of leading AI companies

a. Big Techs

● [Link] (AMZN): Recently, Amazon launched CodeWhisperer, an AI pair

programming tool similar to GitHub’s Copilot that can autocomplete entire functions based on
only a comment or a few keystrokes. AMZN also provide the platform like AWS AI Services
for other companies to develop AI.
● Microsoft (MSFT) Microsoft continues to leverage its strategic stake in OpenAI as it aims to
enhance its Bing search engine and Edge web browser to take on Google in internet search
and office productivity tools. Meanwhile, OpenAI in March launched its next-generation
chatbot technology.
● Alphabet's (GOOGL) Google: The decision goaded Google into launching its own AI
chatbot, Bard, which gave an incorrect answer in a promotional video, failed to impress
investors and erased $100 billion in value from parent company Alphabet. Google also have
develop several AI models in the past like Go and provide Google Cloud AI Platform as a
platform for AI developer,
● Nvidia (NVDA) at its GTC conference announced a wide-ranging portfolio of AI products,
including new graphics processing units, data center hardware, AI software models and AI
as a service. NVDA stock belongs to the IBD Leaderboard. It's IBD's curated list of leading
stocks that stand out on technical and fundamental metrics.
● Tesla (TSLA) founder and Twitter owner Elon Musk has created a new artificial intelligence
company called [Link] or TruthGPT.
● Adobe (ADBE) on March 21 unveiled generative artificial intelligence services for creative
professionals and marketers. They include Adobe Firefly, a new family of creative generative
AI models focused initially on image generation and text effects.
● Salesforce (CRM) on March 7 rolled out Einstein GPT, which adds OpenAI's features across
its software platform. Pilot technology will be available first on its Slack messaging tools.
Salesforce has used predictive AI tools since 2016.
● Barclays also picks Sprout Social (SPT), Sprinklr (CXM), Iron Mountain (IRM) and Seagate
Technology (STX). BofA likes Taiwan Semiconductor Manufacturing (TSMC), Adobe,
Shutterstock (SSTK) and online advertising firm Appier Group (APPIF).

b. Start Ups
Similar to the key players: AI startups can be divided into several categories based on the
type of technology they develop:
● Machine learning startups: These companies focus on developing algorithms that
can learn from data and make predictions or decisions based on that data.
● Natural language processing (NLP) startups: These companies specialize in
developing algorithms that can analyze and understand human language, such as speech
recognition, text analysis, and language translation.
● Robotics startups: These companies focus on developing robots or robotic systems
that can perform tasks autonomously or with minimal human intervention.
● Computer vision startups: These companies develop algorithms that can analyze
visual data, such as images or videos, and extract meaningful insights from that data.

AI startups typically operate in fast-moving and rapidly evolving markets, this is a list of
potential AI startups that has gained some significant spotlight in 2022:

● GGWP: This company, co-founded by former professional gamer Dennis Fong, is

combating toxicity in online gaming.
● [Link]: This company has brought together a team of research scientists with
experience at Salesforce and Stanford in order to develop a search engine that enables
users to compare and sort results.
● ACTIV Surgical: This company is focused on surgical tech.
● Healx: This company is focused on drug discovery for rare diseases.
● Tractable: This company is working on visual damage appraisal for cars.
● Hazy: This company is focused on synthetic & anonymized financial datasets.
● Whisper: This company is developing sound separation tech to improve hearing aid
performance.
● Canvas Construction: This company, founded by individuals with experience at Boston
Dynamics and the MIT Lincoln Laboratory, is focused on AI-driven robotics for drywall
finishing in the construction industry.
● Agility Robotics: This company is developing humanoid robots for warehouse and
logistics use cases.
● DataFleets: This company is focused on privacy-preserving data collaboration and
analysis.
● Via: This company provides on-demand transit services using a combination of AI, mobile
technology, and operational expertise.
● Spot: This company is focused on developing agile mobile robots for use in industrial and
commercial environments.
● UiPath: This company provides a platform for robotic process automation (RPA) that
enables companies to automate repetitive tasks.
● OpenAI: This company is focused on advancing artificial intelligence in a safe and
beneficial way. It is known for its work in natural language processing and developing
large-scale language models like GPT-3.
● [Link]: This company has developed a voice-enabled digital assistant for doctors that
uses natural language processing to help physicians create clinical notes and perform
other administrative tasks more efficiently.
● Tractable: This company uses computer vision and deep learning to automate the
assessment of insurance claims for vehicles and property damage.
● Brain Corp: This company develops software and hardware for autonomous mobile
robots used in the retail, healthcare, and hospitality industries.
● SenseTime: This company is a leading AI unicorn in China, known for its work in
computer vision and facial recognition technology. It provides solutions for a range of
industries, including healthcare, finance, and retail.
 source : CBinsight
The cohort above is reported by CBInsight about the status of AI startup market in 2022. Here
are some key points to pin out:
● The cohort of AI startups has raised $12B+ from 650 investors across 300+ equity deals
since 2017. This shows that AI startups are receiving significant investment from a
diverse range of investors.
● This year's list includes 16 unicorns with a $1B+ valuation. A unicorn is a startup that has
reached a valuation of $1 billion or more, and this indicates that some of the AI startups
on the list have already achieved significant success.
● The winners represent 10 different countries, with 73 headquartered in the US, followed
by the UK with 8 winners and Canada with 5. This highlights the global reach of AI
startups, and shows that innovation is happening in many different parts of the world.
● 39 of the winners are seed/angel or Series A companies with promising product ideas.
This indicates that there is still a lot of early-stage innovation happening in the AI startup
space, and that there is potential for more startups to emerge and disrupt existing
industries.
● Healthcare is the largest share of the winning cohort with 10 companies, followed by
finance & insurance with 7 winners. This shows that AI is being applied to many different
industries, and that healthcare and finance are particularly ripe for disruption.
● Novel applications of AI include sound separation tech to improve hearing aid
performance, AI-driven robotics for drywall finishing, and humanoid robots for warehouse
and logistics use cases. These examples show that there are still many untapped
opportunities for AI to solve real-world problems and improve people's lives.
2. Overview of recent mergers and acquisitions in the AI industry
Despite the banking crisis, venture capital is flowing to AI startups. Andreessen
Horowitz led a $150 million funding round for [Link], which now has a valuation over
$1 billion.
Meanwhile, AI startup Adept recently raised $350 million, also at a valuation over $1
billion. Adept has studied how humans use computers — from browsing the internet to
navigating a complex enterprise software tool — to build an AI model that can turn a text
command into sets of actions.
IBM sold off Watson Health to private equity firm Francisco Partners. The deal
reportedly came in above $1 billion. But IBM had invested much more in Watson. Despite
the Watson setback, IBM continues to acquire AI startups.
IBM has bought at least five artificial intelligence companies since mid-2020. They
include [Link], Turbonomic, ReaQta, MyInvenio and WDG Automation.
Other Chinese behemoths including Alibaba, [Link] and WeChat parent Tencent
have stated they are working on ChatGPT-like products of their own—Tencent has
reportedly set up a team to develop the product, according to Reuters—though details are
sparse and they have not outlined specific timetables for when they will implement them.
 AI adoption has more than doubled over the past five years with investment in AI
increasing quickly: Funding of generative AI increased by 71.4% year over year in 2022. In
particular, global private investment in AI increased 48% year over year in 2021 to
USD$93.5 bn, more than double the total private investment in 2020.
 V. Investment Opportunities

1. Analysis of the investment potential of the AI industry

a. Digital Trends which support the development of AI

Industrial software: an area of considerable growth

The more generic tools and Internet of Things (IoT) platform software appear to offer the
fastest growth as enterprise software firms expand their offerings to the industrial world.
This is most apparent in cloud infrastructure and the ongoing shift in control, processing
power and analysis to the machine level or edge, as well as in the growth in data and
analytics run on the cloud. BofA Global Research and IoT estimates the industrial
software market could be worth over $250 billion in annual sales by 2027

Software-as-a-service models reduce up-front costs of adoption (SaaS)

Many vendors are now transitioning to software-as-a-service (SaaS). Under the SaaS
subscription model, clients pay a monthly subscription fee to use the software, which
differs markedly from the perpetual licensing model with a significant one-off purchase of
a license at the inception of the contract. With reduced up-front capital costs and greater
flexibility for customers old and new, the SaaS model is driving faster adoption rates. In
the case of economic recession, subscription cancellations are less likely than
postponement of license renewals.

Floating in the industrial cloud

BofA Global Research believes that working from home will continue to have far-reaching
effects for the industrial world, as well as the more office-bound professions. For the first
time, many factory-based supply chain systems and working practices were forced into
the cloud and off-premises by lockdowns. In fact, according to BofA Global Research,
close to 50% of the global workload is expected to be cloud-based in three years’
time (from 42% today). The platforms offered by cloud vendors offer a place for smaller,
independent companies to develop their offerings. Growth is complemented by the
portfolio capabilities the cloud vendors bring to the table such as cybersecurity,
virtualization software and remote access.

Internet of Things (IoT)

IoT refers to the combination of hardware devices (such as cellphones, home video
surveillance systems, automotive GPS systems) and networks (including cellular data,
WAN and LAN, WiFi spots, and process automation and control networks) that together,
comprise a vast, decentralized “system of systems.” The amount of data ingested and the
ability to “act on” the physical world represented by this system far surpasses any
individual system ever designed.
Industry, government, academia, and the military, among others, are all developing tools,
techniques, and technologies that will provide society the potential benefits of being able
to tap into these tremendous resources. AI/ML technologies can be applied to this
challenge by providing insights to increase efficiency, better leverage its capabilities, and
improve our overall ability to manipulate the physical world.
 Blockchain
Representing a fundamental shift in how separate, disparate systems can be made to
interact with each other, blockchain technology allows systems, individuals, and
companies to share data, collaborate, and execute critical transactions without the need
to architect and implement a custom system. Refer to the ACT-IAC Blockchain Prime and
the ACT-IAC Blockchain Playbook for more technical information regarding this
technology. It should be pointed out that blockchain may benefit AI systems by allowing
them to collaborate and transact exchanges at a distance. AI may also benefit blockchain
implementations by identifying potential use cases and protecting against cyber threats.

Specialized computer chips

Graphical Processing Units (GPUs), while originally designed for gaming and other
graphics-intensive processes, have proven to be a huge boost to neural networks. GPUs
save both time and money compared to a traditional Central Processing Unit (CPU) when
training neural networks. For example, one cloud provider tested a single GPU and found
it to perform as well as 100 CPUs. Although a GPU costs slightly more than a CPU on an
hourly basis, the hundredfold increase in speed results in about a 98% cost reduction.

2. Discussion of the risk factors associated with investing in AI

There are several risks that an AI firms may face when operating includes of:
a. Technical risks
AI is still an emerging technology, and there is always the risk that the technology may
not work as intended, leading to technical failures, errors, or glitches.
b. Data quality risks
AI systems require large amounts of high-quality data to function effectively. However,
there is always the risk of bias or errors in the data, which could lead to inaccurate or
biased results.
c. Regulatory risks
As AI continues to grow and become more prevalent, there is an increasing regulatory
risk associated with investing in AI. Regulators may impose new regulations or
restrictions on the use of AI, which could limit the technology's potential or increase the
cost of development.

Source: [Link]
d. Cybersecurity risks
AI systems often rely on large amounts of sensitive data, making them a prime target for
cyber-attacks. Hackers may attempt to steal or manipulate data to influence AI systems
or cause harm.
e. Intellectual property risks
 As AI becomes more prevalent, there is an increasing risk of intellectual property
infringement, where competitors may copy or replicate AI systems or algorithms, leading
to reduced profitability or market share.
f. Ethical and social risks:
AI has the potential to disrupt traditional industries and create new ethical and social
challenges. For example, the displacement of human workers, biases in decision-making,
and the potential for AI to be used for malicious purposes.
g. Lack of transparency:
Some AI companies may not be transparent about how their algorithms work or the
dataset they use which are the key point to evaluate and predict the future performance
of a company, which can make it difficult to evaluate their technology.
 VI. Conclusion And Recommendation
1. Summary of the key findings of the report
a. SWOT Analysis:

STRENGTHS + WEAKNESSES –
● Dependence on data: AI relies heavily on
● Efficiency: AI can automate repetitive tasks, data to learn and make decisions. If the data
enabling businesses to operate more is incomplete or biased, it can negatively
efficiently. impact the accuracy and effectiveness of AI.
● Accuracy: AI can analyze large volumes of ● Limited creativity: While AI can automate
data and provide insights that humans may routine tasks, it may not be able to perform
not be able to identify. creative tasks that require human input.
● Personalization: AI can provide personalized ● High initial costs: Implementing AI technology
experiences for customers, improving can be expensive, requiring significant
customer satisfaction and loyalty. investment in hardware, software, and talent.
● Innovation: AI is driving innovation in ● Privacy concerns: AI can collect and process
industries such as healthcare, finance, and sensitive data, raising concerns about privacy
transportation, among others. and security.

OPPORTUNITIES + THREATS –
● Emerging markets: As AI technology ● Ethical concerns: As AI becomes more
becomes more widely available, there are pervasive, there are concerns about its
opportunities to expand into emerging impact on society, including issues such as
markets, such as Asia and Africa. bias, job displacement, and privacy.
● New applications: AI can be applied to new ● Regulatory risks: AI is subject to regulatory risks,
industries, such as agriculture, construction, including data protection regulations, privacy
and education, creating new business laws, and ethical standards.
opportunities. ● Cybersecurity risks: AI can be vulnerable to
● Improved decision-making: AI can provide cyber attacks, which can compromise
insights that enable better decision-making, sensitive data and systems.
improving operational efficiency and ● Competition: As AI becomes more widely
reducing costs. adopted, competition among AI providers is
● Customization: AI can be used to personalize expected to increase, potentially driving
products and services, enhancing the down prices and margins.
customer experience and driving loyalty.
2. Discussion of the future outlook for the AI industry
 The future outlook for the AI industry is extremely promising, based on the report conducted by
PwC. The projected $15.7 trillion contribution to the global economy by 2030 demonstrates the
immense potential that AI has to transform businesses and industries worldwide.

Increased productivity and consumption-side effects are expected to be the two main drivers of this
growth, with AI being used to automate tasks and processes, optimize operations, and enhance
customer experiences. This will lead to significant cost savings, revenue growth, and improved
efficiency for businesses across various sectors.
On the other hands, the new ecosystem between SME/Start Up develop AI and Big Tech will form in
order to support small companies focus on the applications people use while the big ones provide
the raw materials and tools for the processing.

Beside, the SaaS models will be a booster for big tech to apply AI in their service ecosystem. For
example, Microsoft has applied GPT to Bing Search, Edge and Github follow up with the enterprise
solution such as Office 365, Teams while Amazon is planning to apply its new AI to the AWS system
called the code whisperer similar to the Co-Pilot.

The emerging markets have the potential to surpass their more developed counterparts. This is
because they can leapfrog traditional infrastructure and adopt AI more readily, leading to a faster and
more significant impact on their economies.

AI can also bring to start-ups and yet-to-be-founded businesses, demonstrating the scope for
innovation and growth that AI can enable. As AI continues to evolve and become more accessible,
we can expect to see a surge in entrepreneurial activity as businesses seek to capitalize on the
opportunities that AI presents.

Overall, the future outlook for the AI industry is extremely positive, with AI set to play a significant
role in shaping the global economy in the coming years. As businesses continue to adopt and
integrate AI into their operations, we can expect to see increased productivity, enhanced customer
experiences, and new avenues for growth and innovation.

3. Recommendations for investors considering investing in AI

The top artificial intelligence stocks to buy span chip makers, enterprise software companies and
technology giants that utilize AI tools in many applications.
In general, look for AI stocks that use artificial intelligence to improve products or gain a strategic
edge. Also, be on guard against poor performing companies that suddenly call themselves leaders in
AI technology.

● Research the market: Before investing, it's essential to research the AI market
thoroughly. This includes understanding the current trends, market size, competition, and
potential growth opportunities.
● Understand the technology: It's essential to have a basic understanding of AI technology,
including machine learning, natural language processing, and computer vision. This will
help you evaluate the potential of AI companies and products.
● Look for diverse applications: AI is being applied across various industries, including
healthcare, finance, transportation, and more. Look for companies that have a diverse
range of applications in different sectors to reduce your risk.
 ● Evaluate the business model: Understanding a company's business model is essential to
evaluate its potential for success. Look for companies that have a sustainable business
model and generate revenue from their AI products and services

However, similar to others new products line and industry, investor might expose to several risks
such as:
● Market price risk: The company may face a significant decrease in market price if its
quality of the product cannot compete with its peers as expected.
● Monopoly risk: As if there is any AI or company that leading in a specific task or sector, it
is very difficult for other competitors to compete and new joiners to penetrate.
● Regulation: As AI continues to evolve, there is a risk that governments may introduce
new regulations that could limit the use or development of certain AI technologies.
● Lack of transparency: Some AI companies may not be transparent about how their
algorithms work or the dataset they use which are the key point to evaluate and predict
the future performance of a company, which can make it difficult to evaluate their
technology.
In conclusion, the portfolio focus on the diversify of industry such as health care, automotive,
retail and financial service will benefit the investor in short term while minimize the systematic risk of
each industry. On the other hand, a large portion of portfolio investing to the big techs company
having various product in the Ecosystem such as NVIDIA, Microsoft or Amazon will be an safer
choices. Side industry that support the AI development while can also being a good and sustainable
stand alone industry such as Chipset and Hardware like TSMC, NVIDIA and Intel will be considered
the least volatile in the AI ecosystem. For start ups, this period is making a frenzy in the number of
start ups and capital from VC funds to catch up with the future trend. However, these company,
especially the new joiners in 2022 and 2023 need to have a detail and prudent evaluation to mitigate
the risk mentioned aboves.

.
 References
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