Oscar Gutierrez Zozuria
prologue
First, let me say that the information contained in this article is being treated primarily as a reporter rather than an analyst.
Race to Dominance and Success Competitors in artificial intelligence and the potential rewards that arise for companies and their shareholders are in full swing. During the upcoming quarterly reporting period, attention to AI will once again become dominant for nearly every company that knows even the slightest bit of its connection.
So the question investors have to ask themselves is, how do you distinguish between companies that are likely to actually dominate, or have some success in increasing both sales and earnings, and those that are left behind? Is it possible?
recently An article in the German newspaper “DIE WELT”, we may have found the answer. This article reviews ARIAD Asset Management research papers that focus entirely on a company’s patent portfolio and, specifically, what percentage of that company’s patents are likely to contribute to his future competition in the AI space. It focuses on what is directly related to your chances of success. I thought it would be a good time to share this research with his fellow SA readers. This list describes and documents the companies that we believe may be AI winners.
Investors will need to determine which companies are at the forefront of the AI race to the top, and which are not, the study says. The winner may well be rewarded. According to the study, Bloomberg estimates that AI could generate about $1.3 trillion by 2032. In a knowledge society dominated by AI, patents will be the raw material that drives the economy and daily life. While patent-protected technologies are expected to bring transformative advantages to their respective companies, they can only provide competitive advantages and, in the best-case scenario, could outperform the stock market. There is a nature.
To identify companies with potentially good AI, ARIAD Manager Andreas Schubert and his staff first determined which patent classes were eligible, based on the European Patent Office and US Patent and Trademark Office technology classes. I tried to identify which ARIAD then identified a total of 15 patent classes as AI-related and created a list from them. This gives us an idea of how many patents a company holds and how high the proportion of AI inventions in its patent portfolio is.
At the top is health group candidate United Health (UNH). With 160 patents, almost half of her innovation wealth is AI-related. Especially in the medical field, AI can be used in diagnostics, surgery, and even health insurance. UnitedHealth is an integrated healthcare group offering the entire value chain from insurance to medical services.
In second place is an AI company from Hong Kong, which in my opinion is the most controversial company on the list. SenseTime Group (OTCPK:SNTMF) specializes in AI image and facial recognition. (Attention! – current price is less than $0.40) The company uses algorithms and machine learning to use AI technology in various fields such as security, surveillance, automotive industry, healthcare industry, etc. 42% of the company’s 1650 patent portfolio belongs to one of 15 AI categories.
The third place is a software company whose products are used for the digitalization of government. UiPath has (PATH) 188 patents dedicated to AI.
They are followed by Baidu (BIDU), Adobe (ADBE), ServiceNow (NOW) and TuSimple Holdings (TSP), an autonomous driving system provider for trucks.
Social network Snap Inc (SNAP) is also seen as well positioned. His DexCom Inc (DXCM), a manufacturer of medical devices that measure blood sugar in real time, also holds a high percentage of AI patents.
As you know, NVIDIA (NVDA) is the world’s first chip maker with a market cap of over $1 trillion. The company supplies the chips that AI users want. Although its market value has risen significantly, it is still the dominant vehicle in the current investment environment. A study by ARIAD Asset Management found that 17% of the company’s 1762 patent inventory is focused on his AI.
The ARIAD list could be a good start for investors looking for wealth and happiness, as there is a gold rush going on with investors looking for AI’s next big winner instead of gold. This list identifies companies that have a good chance of actually getting into the game and rewarding patient shareholders.
The total number of AI patents may not be a sufficient criterion. The report found that for smaller companies, the number of innovation patents is lower, but more patents can be decisive. Hyperfine (HYPR) holds only 43 patents, but AI has an 11% share. And the quality of patents is particularly high.
According to its website, Hyperfine is a breakthrough MedTech company that developed Swoop, the world’s first FDA-cleared portable magnetic resonance imaging (MRI) system that can provide point-of-care neuroimaging. “Our mission is to transform patient care by establishing access to life-saving diagnostics and actionable data in the healthcare setting.”
According to Andreas Schubert, 80% of patents have no economic value. That’s why it’s so important to figure out which patents really have value. Hyperfine is such a company.
Schubert is also a supporter of Alarm.com (ALRM). The company, which he spun off from Micron (MU) in 2000, is a US company that offers cloud-based services in the areas of remote he control and smart he home monitoring. Last year, the company made about $840 million in revenue.
With 99 AI patents and 5.1% of the total patent stock, Digimarc Corporation (DMRC) is one of Schubert’s AI favorites. Digimarc relies on a rapidly growing business sector where AI will play an increasingly important role due to digital watermarking.
RaySearch Laboratories (OTCPK:RSLBF) is on the list with 14 AI patents, representing 4.4% of the company’s total patent stock. This Swedish company provides software used in radiotherapy for cancer.
US companies on ARIAD’s list of AI patent leaders include Meta (META), IBM (IBM), and Amazon (AMZN).
my thoughts
As I mentioned earlier, I am the reporter providing the information in this article to the SA readers, but I would like to share my thoughts and recommendations at this time.
It remains to be seen whether AI will change the world we live in like the Industrial Revolution did in the 18th and early 19th centuries. What is clear to me at this point is that there will be major changes in how we live and work. Jobs are lost and new jobs are created. People with limited educational backgrounds will be further left behind.
The biggest and strongest companies will continue to do so. As interest rates begin their long-awaited decline later this year and into 2024, we expect M&A activity to begin to pick up significantly as today’s big companies absorb smaller competitors in areas where they can acquire faster and cheaper. are doing. Instead of generating creativity internally,
Companies like SenseTime have a number of very attractive AI patents, but they face a serious uphill battle. The company went public in December 2021, but its initial public offering was sanctioned by the U.S. Treasury Department for allegedly playing a role in developing facial recognition software used to crack down on Uyghur Muslims in the Xinjiang region. I was greatly frustrated by receiving Western China. As such, I view investing in this company as a long-term call option to the success of AI and the company’s progress in contributing positively to it.
summary
I am an investor in SNAP, but have not done any in-depth research into the companies reviewed in this article. Readers are therefore urged to do their own due diligence before investing in any of the companies featured here.
Regardless of whether a company is one of the winners, we take companies on the ARIAD list seriously if we accept the argument that AI-focused patents could play an important role. The need is clear. Certainly, other factors will play an important role when successes and failures are analyzed in the months and years ahead. The effectiveness of senior management and a knowledgeable and involved board of directors play a large role in the success or failure of many companies.
Many companies are already familiar names, while others may be unfamiliar to some investors. Admittedly, some of the names on ARIAD’s list are companies I’ve never heard of before, but I’d like to explore them further in the future. The search for investments that contribute to the success of investment strategies is never-ending. While some investment professionals argue that the search for AI winners is just hype, the majority argue that AI is here to stay and will change the world we live in. If the ideas discussed in this report prove to be of any value, our chances of being part of this new world could be a step forward.
