Investing on the Edge of Technological Development: Deep Dive Into AI With Moonshot

Key Takeaways

Following the launch of ChatGPT in November 2022, artificial intelligence (AI) has rapidly evolved into a transformative force across industries. The AI sector is now undeniably positioned as a cornerstone of future economic growth.
With projections indicating a market expansion from USD 40 billion in 2022 to USD 1.3 trillion by 2032, investing in AI presents significant opportunities for businesses and economies worldwide. This growth trajectory depicts AI's potential to drive innovation and generate substantial economic returns.
Companies like OpenAI, Anthropic, and xAI are at the forefront of AI innovation. By leveraging cutting-edge technologies and substantial investments, these companies are not only pushing the boundaries of what AI can achieve but also shaping the future landscape of global industries.

Artificial intelligence (AI) has quickly and swiftly developed from a technological novelty to a revolutionary force that has transformed numerous industries around the globe, including healthcare, energy, finance, and beyond. With AI carrying all this weight, the question arises: What exactly is artificial intelligence? The term artificial intelligence describes computer programs that are capable of carrying out complex tasks previously limited to human performance, such as problem-solving, thinking, and decision-making. Although AI has been around for a while, the modern AI revolution took a significant step forward with the debut of ChatGPT on November 22nd, 2022.

Initially, AI served as a tool to assist humans by improving individual convenience and productivity, managing tasks such as directions, reminders, proactive information delivery, routine client inquiries, and integration with smart home systems. Siri and Alexa are good examples of this, founded on AI, and serving as voice assistants. The now well-known chatbots that pop up to help you navigate websites also come to mind. These early capabilities laid the groundwork for the advanced AI technologies that are now widely used in a variety of industries, and accomplish much more than basic AI assistants and chatbots.

Indeed, today the impact of AI is much greater than mere assistance. It’s actually reshaping the essence of multiple industries. In the healthcare field, AI is being used to diagnose diseases and develop new drugs, while in the renewable energy sector, it is being used to optimize energy production by analyzing weather forecasts and real-time data for sources like wind and solar.

Meanwhile, in the financial domain, institutions are leveraging AI to detect fraud, develop trading strategies, and provide personalized wealth management services. The facts are undeniable – AI's capacity to handle massive volumes of data, spot patterns, and make accurate predictions is fueling transformation and innovation across almost all industries, pushing progress and efficiency to new heights.

Envisioning the Future of AI

Artificial intelligence (AI) has emerged as a major global driver of innovation, attracting significant investments from tech giants like Microsoft, Amazon, Google, Apple, Meta, and IBM. These companies have allocated billions of dollars towards AI research, development, products, services, acquisitions, and the critical data center infrastructure required to build and operate AI capabilities. The bottom line is this: They recognize AI's transformational potential and have decided to make it a strategic priority.

This strategic focus has catalyzed a broader market trend, driving significant investment and development in AI. The disruptive capability of this technology has sparked a generative AI market poised for explosive growth, with Bloomberg Intelligence estimating that it will grow from USD 40 billion in 2022 to USD 1.3 trillion by 2032, potentially generating an additional USD 280 billion in software revenue.

Generative AI revenue
Source: Bloomberg Intelligence

What’s more, many of the world's billionaires view artificial intelligence as one of the most promising commercial opportunities for future business management. In fact, a UBS survey found that 65% of billionaires believe that AI will be one of the most revolutionary technologies the world has ever seen, driving new goods, services, and business models in years to come.

Technologies offering the biggest commercial opportunities for current active operating business(es) over the next 12 months
Source: UBS

The spectacular all-time highs observed in major stock markets throughout the world during the first few months of 2024 have made AI's enormous potential abundantly clear. Despite continuous debates around central bank interest rate hikes and rising geopolitical tensions, equities markets in Switzerland, Europe, and the United States all hit new record levels by mid-May, with AI and technology stocks being standout performers. Interestingly enough, according to BlackRock, private investors account for the vast majority of investments in AI businesses.

Investments in AI by different capital sources
Source: BlackRock

A McKinsey study highlighted the immense potential of generative AI to transform businesses across a wide spectrum of operations. The firm identified 63 use cases spanning 16 business domains that, if implemented across industries, could generate an annual economic value ranging from USD 2.6 trillion to USD 4.4 trillion.

While generative AI promises to disrupt business operations as a whole, four sectors are expected to experience the most transformation: customer operations, marketing and sales, software engineering, and research and development. Collectively, these four domains account for approximately 75% of the total annual value from the identified generative AI use cases, underscoring the technology's tremendous potential to revolutionize the way businesses function and drive efficiency gains across crucial business categories.

Just as electricity transformed almost everything 100 years ago, today I actually have a hard time thinking of an industry that I don’t think AI will transform in the next several years.
— Andrew Ng, co-founder of Coursera and Google Brain

Complementing these findings, a separate study by PwC estimated that AI's potential contribution to the global economy could reach a staggering USD 15.7 trillion by 2030. These projections and studies collectively highlight AI's outstanding ability to transform industries, drive innovation, and generate economic growth on a massive scale.

What Companies Are Paving the Way?

In the rapidly evolving realm of artificial intelligence, several companies are boldly reshaping industries and pushing the boundaries of technological innovation. At the forefront is OpenAI, celebrated for its GPT models, which have achieved unprecedented adoption, serving billions of users and being integrated into several Fortune 500 companies – a new benchmark in generative AI.

On the other hand, the front-runner of safe AI — Anthropic. Not only does it capture attention with its pioneering “Constitutional AI” framework, ensuring AI outputs are safe and unbiased, but it’s also backed by substantial investments from tech giants like Amazon and Google.

According to CB Insights' 2024 rating, both Open AI and Anthropic are in the lead when it comes to equity fundraising because of their advancements in natural language processing, computer vision, and other AI subfields. Although OpenAI stands ahead with a remarkable USD 14 billion in equity, solidifying its position as the most funded AI enterprise in the world, Anthropic holds an impressive second place, with USD 7.3 billion in investments.

Meanwhile, xAI, founded by Elon Musk, whose pivotal roles in companies like SpaceX, Tesla, and Neuralink are well-documented, has also emerged as a significant force in the AI sector. Musk is making waves with his ambitious plans for his startup, xAI, to build a massive supercomputer, dubbed the “Gigafactory of Compute,” aimed at enhancing its AI chatbot, Grok. This project represents a significant leap in computational power for AI applications, with a bold aim to create a Graphics Processing Unit (GPU) cluster – providing access to massive computing capacity – several times larger than any existing ones. Musk's vision for xAI demonstrates a clear intention to push the boundaries of AI capabilities and computational scale.

All of these companies are propelling innovation and establishing new industry standards, representing a true testament to AI's jaw-dropping transformative potential.

OpenAI — The Leader of the AI Race

OpenAI's ChatGPT has emerged as a revolutionary force in generative AI, presenting unprecedented success and growth. Nothing short of miraculous, the newest model, GPT-4o, can now seamlessly understand and integrate visuals, text, and audio inputs.

It comes as no surprise that this groundbreaking technology has captured the world's attention, fueling ChatGPT's rapid adoption. Within a mere five days of its launch, the platform had already amassed 1 million users, and within two months, that number skyrocketed to an incredible 100 million. As of May 2024, ChatGPT maintains 2 billion monthly visits, averaging 77.7 million daily users.

Underpinning this meteoric rise is OpenAI's financial success, which has mirrored the unprecedented growth of ChatGPT. The company surpassed the USD 2 billion annual revenue mark in December 2023, a milestone largely attributable to the overwhelming success of ChatGPT. Even more shocking, financial experts predict that OpenAI's revenue could soar to an astonishing USD 4 billion by the end of 2025.

One of the main reasons for this significant revenue increase is the widespread adoption of OpenAI GPT models by business customers. In a testament to its never-before-seen capabilities, a staggering 92% of Fortune 500 companies have integrated GPT APIs into their operations. Early adopters of GPT enterprise models, including industry giants like Block, Canva, Carlyle, The Estée Lauder Companies, PwC, and Zapier, are substantially revamping their businesses by using these models to improve communication clarity, accelerate coding processes, swiftly solve complex business challenges, support creative endeavors, and much more.

OpenAI's striking success and growth have been bolstered by substantial investments from tech leaders like Microsoft, which has invested billions of dollars into the company since 2019. With such rapid technological breakthroughs and an unparalleled growth trajectory, OpenAI has firmly established itself as a pioneering force, leading the charge in the generative AI revolution and setting new standards for the industry.

Anthropic — The Titan of Safe AI

Anthropic has received lots of attention for its “Constitutional AI” approach, which incorporates a set of moral rules and norms into the basic architecture to provide AI outputs that are safe, unbiased, and free from toxic or harmful content. The company garnered substantial interest from many renowned companies, including Amazon and Google, which have invested USD 4 billion and USD 500 million, respectively, with Google committed to investing an additional USD 1.5 billion.

This interest, however, extends beyond just funding. For instance, Anthropic and Amazon are collaborating to develop AI models for enterprises leveraging AWS (Amazon Web Services) cloud services and hardware. Through Amazon Bedrock, Anthropic offers tailored AI solutions for specific use cases across various sectors, including “trained healthcare models to healthcare vendors and developers.” This partnership allows for Anthropic’s broader technology reach as well as more valuable user data to improve its models.

Anthropic’s visionary work with generative AI, most recently the introduction of its state-of-the-art Claude 3 family of models, combined with Amazon’s best-in-class infrastructure like AWS Tranium and managed services like Amazon Bedrock further unlocks exciting opportunities for customers to quickly, securely, and responsibly innovate with generative AI.
— Dr. Swami Sivasubramanian, vice president of Data and AI at AWS

The newest version of its foundation AI model, Claude 3, released in March 2024, is on par with OpenAI's GPT-4o and Google's Gemini when it comes to many crucial tasks, most notably coding and processing large volumes of information. Moreover, chatbot Claude shows its commitment to responsible AI by employing safeguards against racism, misogyny, and other harmful content.

Anthropic is rapidly gaining traction and is on track to achieve USD 1 billion in annual revenue by the end of 2024, a notable 6.7x increase from its 2023 figures. Impressively enough, it has already attracted a diverse customer base including Perplexity, Bridgewater Associates, Jasper, GitLab, SAP, Slack, Quora, Notion, Zoom, DuckDuckGo, LexisNexis, and SK Telecom.

xAI – The Next-Generation AI Company Backed by Elon Musk

Elon Musk's artificial intelligence venture xAI recently closed a USD 6 billion funding round. After barely a year, the latest round places it among the top artificial intelligence startups out there. Many of Musk's most devoted allies have invested in xAI's current round, including Andreessen Horowitz and Sequoia Capital, Kingdom Holding led by Saudi investor Prince Alwaleed Bin Talal, Valor Equity Partners, and Dubai-based Vy Capital.

From a performance standpoint, the AI startup’s chatbot, Grok, can generate text and partake in discussions with users, just like ChatGPT and other programs. That said, unlike previous chatbots, it has real-time access to information via X (formerly Twitter) and has been specifically designed for answering edgy and provocative questions with humorous and “rebellious” answers.

xAI is actively developing image-generating capabilities for Grok, allowing it to give more extensive and precise information via online search results. Currently, Grok gets all of its information from X.

Musk has lofty intentions for Grok, noting that 100,000 AI chips would be required to develop the next edition of the AI helper. According to the tech news outlet The Information, he plans to build a massive “gigafactory of compute” supercomputer by late 2025, competing with equally ambitious initiatives proposed by OpenAI and its big-tech partner, Microsoft.

The funds from the round will be used to take xAI’s first products to market, build advanced infrastructure, and accelerate the research and development of future technologies. The company’s mission is to understand the true nature of the universe.
— Elon Musk, founder of xAI

Final Thoughts

In the coming years, AI will swiftly alter the way we think, operate, and solve issues, paving the way for awe-worthy innovation and transformation. OpenAI, Anthropic, and xAI are just three examples that demonstrate how artificial intelligence is redefining industries and driving a historical paradigm shift.

Moonshot offers a compelling opportunity to join the AI revolution by gaining early exposure to pioneering companies before they go public. The timing to become part of this seismic shift in AI capabilities all while pursuing attractive investment returns has never been better. By investing through Moonshot's platform, you can position yourself at the forefront of one of the most promising technological breakthroughs of our time.

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