Artificial Intelligence & SRS Portfolio

I believe we are at the cusp of a new wave of innovations to be brought about by Artificial Intelligence ("AI"). It is exciting yet "scary" at the same time when some of the AI features are incorporated into our daily lives. This is very different from Meteverse or Crypto, where its impact is less felt by everyone and it doesn't solve existing problems (or save the earth).

AI has now developed where new content in terms of videos, images, texts, codes can be created in a matter of minutes. AI has a much deeper impact than just giving you nicer headshots for your CVs or predicting how Jacky Cheung will look in 20 years time.

Jacky Cheung's concert July 2023

The Edge has an interesting article this weekend entitled "Microsoft's sudden AI dominance is scrambling Silicon Valley's power structure".

The article wrote about how Microsoft ditched its 3 internal AI research teams and bet on OpenAI (that owns ChatGPT) and invested US$13 billion in OpenAI since 2019. It has since leapfrogged Google's DeepMind and Baidu in the AI space. Funnily enough, Elon Musk was a founder in OpenAI that has since sold its stake and Elon is betting on a new AI startup called xAI.

Altman's 2019 deal with Microsoft cost him more control than he would have given up to a venture firm. Microsoft got the exclusive right to provide OpenAI's cloud computing infrastructure and the right to sell OpenAI services to Microsoft customers. In exchange, Altman got something no VC could provide. "Our problem is not capital," he says. "Our problem is, how are we going to build the computing infrastructure we need?" Microsoft agreed to build OpenAI, an enormous computer with tens of thousands of high-end Nvidia Corp chips customised to OpenAI's specifications — "a real snowflake", Scott says.

"This is a little bit like the Windows 95 moment" and the idea is to bring AI to everything then cash in. Microsoft's first commercial use of ChatGPT was to apply it to Bing. Microsoft's search bar accounts for 3% of the search ad market, compared with about 91% of Google's, according to Similarweb. That made it an ideal lab: too small for Microsoft to care all that much about screwing up but with a massive pile of money on the other side of the table. To investors, it was obvious a search engine that gives you its answers instead of links would be a calamity for Google's advertising business, which depends on charging for certain links. Google is now frantically adding AI to its tools.

The question is how do I get exposure to AI for the next decade? There are a few ways to gain exposure in this space.

1. Buy stocks such as NVIDIA and Microsoft that will directly benefit from this AI phenomenon or indirectly (Meta etc)
2. Buy stocks that provide the AI infrastructure as huge data centres or cloud computing. See the list here.  

What if you believe that the best way to catch this wave is actually in the start up phase? (Please see the article from Bloomberg on the top 10 AI companies to watch). Unfortunately it will be quite a risky way as failure rates are high for a single company. 

Recently my private banker at DBS introduced a fund called Altrium Growth Fund I and it invests in venture capital and early stage growth funds. The fund is already invested in top tier names such as Accel, Lightspeed and Andresen Horowitz (who famously quoted Why Software Will Eat the World and now Why AI Will Save the World). I attended the talk conducted by the manager as well. The minimum investment amount (US$200,000) is quite manageable as the capital will be drawn in phases over the next 4 to 6 years. I thought it is a good bet if I want to get exposure to AI startups. I am not sure if Altrium Growth Fund is in the Andresen's fund that invested in Character.AI but it is listed as one of the top 10 AI companies. I will find out from my RM and if it is, it will be quite interesting. 

Chat with your favourite personality

I tried having a conversation with "fake Elon Musk", not sure if this is a real use case but it might develop further over time if many "idiots" pay for the service. The last I checked, they haven't had a character called LKY yet, otherwise we can ask him questions that will make him want to "come back" during the 7th month... 

Chat with fake Elon Musk 

So a very long AI article for this afternoon, which I hope eventually I can outsource this IPO and blog writing to a machine and make myself redundant and perhaps I can have more time to sit under the coconut tree and sip a glass of champagne!

What about the SRS portfolio? Heck it as I have nothing to update on it 😆 and I can't use it to invest in AI stocks. You know that I am thinking about such things all the time and I am seriously considering whether I should put some money into Altrium Growth Fund I (closing in August when I last checked in with my RM).

Happy AI "ing" ...  

The post above will be created with IPO.AI in future (akan datang 2024).