Fears of artificial intelligence in androids, massive computer facilities, and other devices taking over the world are not stopping investors from searching for ways to make prudent investments.

From AI and automation to robotics, nearly every industry is undergoing disruption. Over the past few months, the world has witnessed significant advancements in AI technology, such as the release of chatbots and image, art, and music generators for public use.

Generative Artificial Intelligence

Generative Artificial Intelligence (Gen AI) is a branch of artificial intelligence that uses machine learning algorithms to create new and original content, such as computer code, images, music, speech, or text. It works by using a training algorithm and ‘learning’ on a large dataset of examples, then using that training to generate new content that is similar to the original examples.

Most recently, the chatter around Gen AI has been brought to the forefront by the web-based Chat Generative Pre-trained Transformer, or as it is more widely known, ChatGPT, from OpenAI, L.L.C. OpenAI is a privately-held company with investors including Microsoft Corporation (Nasdaq: MSFT), Khosla Ventures, Y Combinator, and Guangzhou Cornerstone Asset Management Co.

It has many applications and benefits for various industries, such as entertainment, education, finance, health care, marketing, media, pharmaceuticals, and security.

Some of the leading public companies by market cap that operate in the broader AI and Gen AI industry are:

Microsoft Corporation (Nasdaq: MSFT) – Market Cap US$2.20 Trillion

Microsoft offers cloud computing, software, and hardware products and services, such as Microsoft Azure and Microsoft Cognitive Services. Microsoft’s Azure AI is a collection of AI services that offers developers and data scientists the ability to build and deploy their own AI solutions using high-quality vision, speech, language, and decision-making AI models through simple API calls, and create their own machine learning models using familiar tools and open-source frameworks

Alphabet Inc. (Nasdaq: GOOGL) – Market Cap US$1.32 Trillion

Alphabet, best known for its Google search engine, provides internet-related products and services, such as Google Cloud and Google AI. Google Cloud recently announced generative AI offerings that let developers tap into Google’s foundation models, search expertise, and conversational AI technologies to create enterprise-grade generative AI applications. Google also offers its own Bard chatbot.

Amazon.com, Inc. (Nasdaq: AMZN) – Market Cap US$1.08 Trillion

Amazon operates e-commerce, cloud computing, and artificial intelligence platforms, such as Amazon Web Services (AWS) and Amazon Alexa, and offers pre-trained AI Services to integrate into customer applications and workflows.  

NVIDIA Corporation (Nasdaq: NVDA) – Market Cap US$664.7 Billion

NVIDIA produces graphics processing units (GPUs) and artificial intelligence platforms, such as NVIDIA Omniverse and NVIDIA Clara. According to a report by research firm TrendForce, ChatGPT will require as many as 30,000 NVIDIA GPUs to operate, which costs between $10,000 and $15,000 for each GPU. As AI becomes more mainstream, NVIDIA looks to benefit from the GPU demand.

Meta Platforms, Inc. (Nasdaq: META) – Market Cap US$537.2 Billion

Meta operates social media platforms and applications, such as Facebook, Instagram, and WhatsApp. It also develops artificial intelligence products and services, such as Facebook AI Research and Facebook Reality Labs.

Adobe Inc. (Nasdaq: ADBE) – Market Cap US$116.5 Billion

Adobe provides software products and services for digital media creation and marketing, such as Adobe Creative Cloud and Adobe Sensei. Adobe Sensei is an artificial intelligence and machine learning technology developed by Adobe that powers its Creative Cloud suite of applications and uses AI and machine learning to automate tasks such as organizing, editing, and producing content.

International Business Machines Corporation (NYSE: IBM) – Market Cap US$114.3 Billion

IBM provides IT solutions and services, such as IBM Cloud and IBM Watson. It also develops artificial intelligence products and services, such as IBM Project Debater and IBM AutoAI. In 2011, IBM’s supercomputer Watson beat competitors on the popular game show Jeopardy!   

Final thoughts

The AI field is growing rapidly and has numerous applications in various industries. Major players offer a range of AI products and services, from cloud computing to chatbots and image, art, and music generators. NVIDIA, in particular, is poised to benefit from the increasing demand for GPUs as AI becomes more mainstream. Despite concerns about AI taking over the world, investors are eagerly searching for ways to invest in this space.

Last week some of the major players in the Metaverse joined together to form the Metaverse Standards Forum, which, as the name suggests, aims to set compatibility to make it easier for developers to build across platforms. Standards are important in the early days of tech development to prevent niches and dead-ends (think Betamax and Laserdiscs), which is why Meta (Facebook), Microsoft, Epic Games, Adobe, Nvidia, Sony and others have joined together to create industry standards. Conspicuously absent is Apple, which may yet adhere to the Forum’s standards, or may – as Apple does – choose to go its own way.

Nick Clegg, Meta’s President of Global Affairs, wrote last month in a blog post: “Like the internet, the metaverse will be an interconnected system that transcends national borders, so there will need to be a web of public and private standards, norms and rules to allow for it to operate across jurisdictions.”

There are clearly big plans for the Metaverse, but how big is the Metaverse business? There are lots of estimates to choose from. A recent study projected the global Metaverse market to grow from US$100.27 billion in 2022 to US$1,527.55 billion by 2029. If you still think the Metaverse is just a gaming platform or just for kids, keep in mind that the Metaverse Standards Forum founding members Meta, Microsoft, Epic Games, Adobe, Nvidia, and Sony have a combined market cap of over $3 trillion and have invested billions of dollars in Metaverse development and commercialization.

That is a lot of money going into the Metaverse, but how do you get money out of it? Investors can always buy stock in companies that are themselves investing heavily in Metaverse development. At the moment the biggest name is unquestionably Meta Platforms, Inc. (NASDAQ: FB), previously known as Facebook. Another is 3D content creation leader – and Metaverse Standards Forum founder – NVIDIA Corporation (NASDAQ: NVDA) with its own Omniverse Enterprise. Another is Roblox Corporation (NYSE: RBLX), with a $20 billion market cap and its own version of a metaverse platform that has already hosted virtual concerts that have attracted as many as 33 million viewers to Lil Nas X’s show on their platform.

The Metaverse is essentially an event space, whether it is games or concert events. According to Forbes, concerts in the Metaverse are already making artists millions – as much as $20 million for a single show. And for those who dismiss “games” as a serious source of revenue, the gaming industry generated almost US$201 billion in revenue in 2021 and is anticipated to reach about $435 billion by 2028. Metaverse Standards Forum founder Epic Games just completed a $2 billion fundraising round for games development that included Sony Group and LEGO Group owner Kirkbi.

There are hundreds of companies now selling virtual “real estate”. Much like the millions a good internet domain name can cost, companies are staking out and building Metaverse destinations. In just the month of November 2021 alone, two of the leading digital real estate companies – Sandbox and Decentraland – earned revenues of about $180 million from virtual land sales in the Metaverse.

On a smaller scale, there is a new, growing service sector to support the Metaverse. There are world-builders and studios that create and trade in virtual assets, such as custom Metaverse locations, avatars, wearables, virtual real estate and the now notorious NFTs. NFTs, or non-fungible tokens for unique digital art and assets, seem to have peaked last year and are now on the decline, however in 2020/21 investors reportedly spent US$183 million on the top 10 NFTs, with the most expensive single NFT selling for over $69 million. The era of NFT art as an investment seems to have passed, or at least suffered a sharp decline, leaving many owners wondering what were they thinking.

Notwithstanding the apparent faddishness of NFTs, the Metaverse will require an army of content creators and back-end e-commerce support, much like the early days of web commercialization. It will be an emerging platform for companies to showcase their products, engage shareholders, promote their brands and share news and corporate development. It can be a 24/7 interactive trade show. Like any other promotional asset, it will require updating, new content, and support to keep it fresh and meet changing corporate and stakeholder needs.

Like any new corporate tool, the Metaverse will initially be seen as an annoyance and cost center by many who will reluctantly be forced to adopt it, the way the telephone, fax, email, websites, and recently Zoom, were seen as necessary evils before they became staples of corporate existence.

Will early adopters profit from the Metaverse? Some certainly will, however, like the early days of the internet and e-commerce, it can be hard to pick winners this early in the race. Remember Amazon and Facebook were widely dismissed early on as having no business model and years of unprofitability. The adoption of Metaverse standards will help sharpen the focus for both investors and early adopter companies looking to the future.