Investors need to take a vertical view of the AI revolution.
EVERYBODY IS RUSHING to invest in AI — and with reason, because it’s going to be extremely significant.
Some investors are kicking themselves for missing the boat. While it may be true that Elon Musk, Peter Thiel and Reid Hoffman beat most of us to the punch with OpenAI, that is not the end of the story.
When people think of artificial intelligence these days, they think of generative AI programs like OpenAI’s ChatGPT. But the transformative power of AI goes much further than its ability to generate text, photographs, music, video and other primary materials.
Investors need to take a vertical view of the AI revolution.
The application of AI to each business vertical will transform our world and shape the economies of the future. AI is poised to affect every industry sector, with an impact comparable to the introduction of computerization and, before that, electricity.
Change the world
“Generative AI has the potential to change the world, but you need to be in it for the long haul,” Gary Munitz, Executive Director at Australia-based Macquarie Capital, told PitchBook at the OurCrowd Global Investor Summit in February. “If you understand the real-world use cases, then it’s worth investing in — but if you just think the tech is cool, then it’s not for you. It could be years until we see outcomes, and investors will need to be patient.”
The use of AI will differ depending on the application. To understand the future of AI as investors, and how to deploy capital most effectively, we need to consider each of these verticals, and not just the horizontal impact of AI across the board.
We are already seeing the successful deployment of AI technology in those sectors where the light-speed analysis of vast amounts of data can help produce rapid, automated solutions that previously would have been impossible to achieve — or at least taken much longer.
OurCrowd has around 60 investments — about 15 percent of its portfolio — based on AI technology, and the number is growing.
These companies are not just using general AI principles and technologies, but are developing specific AI techniques applied to specialist areas. Investors specializing in each of those sectors will be better placed to gauge the impact of AI on those industries and the potential of the startups seeking to disrupt them.
The next wave of investment in AI will be in companies applying this new core technology to specific industry verticals that are likely to be revolutionized as a result. There will be huge opportunities for investment in these verticalized plays, which are not yet fully appreciated and are still valued at fractions of their potential.
Just this week, Google Cloud announced two new AI-powered life sciences solutions to accelerate drug discovery and precision medicine.
“These new solutions launching today can transform life sciences organizations by accelerating drug discovery and bringing therapeutics to market faster,” said Shweta Maniar, global director, Life Sciences Strategy and Solutions, Google Cloud. “When patients are waiting for that life-saving treatment in cancer care or that quality-of-life medicine for migraine headaches, this faster time-to-market can have an incredibly positive impact on lives.”
OurCrowd’s AI-powered drug discovery company portfolio company CytoReason already has multimillion-dollar contracts with Pfizer and Sanofi, and is working with many of the top global pharma companies, to develop innovative treatments.
Here are 20 AI verticals for investors to watch, with relevant examples from our own portfolio:
1. AI for medical and life sciences
CytoReason: AI for drug discovery. Pfizer is a strategic investor, also with a $90 million, multiyear software deal. Working with five of the world’s 10 largest pharma companies, including a multiyear, multimillion-dollar deal with Sanofi.
Medaware: AI-powered medication safety monitoring platform identifies preventable medication-related risks, helping to prevent dangerous prescription errors.
Diagnostic Robotics: Integrated population health management, triage and medical navigation.
Sight Diagnostics: Platform for blood analysis and infectious disease diagnostics based on its AI and computer vision technology.
MeMed: Machine learning-based diagnostic solutions for infectious diseases.
Scopio Labs: Computational imaging-based digital microscopes and image analysis tools.
BrainQ: AI-based wearable devices to treat neurological disorders.
AEye Health: Fully autonomous, AI-based diagnostic screening solutions for retinal imaging.
2. AI for mobility
Ride Vision: AI-powered Collision Aversion Technology keeps motorcycle riders safer and saves lives.
CorrActions: Uses existing in-vehicle sensors to measure driver sobriety, awareness, fatigue and other factors, and intervenes via automated systems to alter vehicle’s speed, route and performance. Volvo is a strategic investor.
Autobrains: Automotive visual intelligence platform with new self-learning approach that mimics human driving perception to provide safer, superior performance at lower cost and energy consumption.
Sfara: Transforms smartphones and tablets into a secure mobile safety and analytics platform, saving lives by enabling safety and collision management for global enterprises.
3. AI for financial security
ThetaRay: Detects financial fraud in account movements and protects correspondent banking transactions.
BioCatch: Detects financial fraud in consumer behavior.
4. AI for agriculture and food
CropX: Cloud processing and integration of data from soil sensors and other data sets to optimize water and fertilizer use for farmers.
Taranis: AI-driven SaaS platform transforming demand intelligence for the Agri-business value chain.
Tevel: Flying Autonomous Robots™ driven by state-of-the-art AI and computer vision algorithms to gently pick fruit.
Blue Circle: Cloud-based SaaS platform that gives food and beverage producers unprecedented predictions of yield and crops, quality, timing and unit cost, based on weather, water and input supply and other vital information.
5. AI for space
EdgyBees: AI-powered software that improves geolocation and navigational accuracy by aligning satellite data and imagery with the physical world.
6. AI for energy
mPrest: AI-powered real-time management of smart energy grids and other utilities to improve efficiency.
7. AI for software coding
Tabnine: Generative AI technology to predict and suggest programmers’ next lines of code based on context and syntax.
8. AI for education
Sense Education: Grading tests and student evaluations based on unstructured data.
9. AI for video
D-ID: Generative AI enables users to transform any picture or video into extraordinary experiences, adding instant translations and other features.
10. AI for elder care
Intuition Robotics: AI-based empathetic digital companion for older adults that motivates engagement, connection and independence.
11. AI for materials
Materials Zone: Optimizes and organizes materials science R&D and manufacturing, speeding up time to market to reduce cost and increase revenue associated with developing new materials.
12. AI for content monitoring and verification
Cyabra: Stamp of credibility and trust of social media actors and conversations, filtering between real, bad, and fake, including generative AI. Hired by Elon Musk to expose Twitter fakes.
Spectrum Labs: AI-driven SaaS content moderation platform helps consumer-facing companies recognize and respond to harmful behavior on their platforms.
13. AI for next-gen commerce
Zippin: Checkout-free shopping for a frictionless customer experience, like Amazon Go, that dramatically improves store profitability and delights customers.
14. AI for physical security
SeeTrue: Revolutionizes travel security screening, addressing the challenges of passenger throughput, experience, security, and cost.
15. Semiconductors for AI
Hailo: World’s top-performing AI processor for edge devices with high performance at low cost and power consumption.
NeuReality: Proprietary systems which accelerate the adoption of AI by significantly improving the performance of AI chips, reducing hardware and energy costs.
16. AI for fitness
Kemtai: Uses advanced computer vision to create a personalized home fitness experience, offering users the ability to train with a virtual AI coach.
17. AI for network management
NetOp: Proactive network operations platform predicts and fixes issues on cloud-managed enterprise networks, replacing tedious manual management, monitoring, and remediation.
18. AI for tools and community
Dataloop: SaaS platform for end-to-end data management and quality data labelling, developing AI and machine learning models, enabling clients to shorten time to market and reduce costs.
Data.World: Cloud-native SaaS platform offering the enterprise data catalog for the modern data stack.
19. AI for manufacturing
3D Signals: Adds Industry 4.0 capabilities to the tens of millions of pre-digital production machines that are not yet connected.
Launchpad: Automated product manufacturing ecosystem, utilizing advanced simulation technologies and AI, to substantially reduce manufacturing costs and enable onshoring.
20. AI for business analytics
Anodot: Monitors all business data in real time, enabling customers to proactively resolve revenue, cost, and customer experience issues before they impact the business.
… And this is just the beginning. Stay tuned to this column or the OurCrowd website for further AI investment opportunities in these and other new verticals. This revolution is just getting started.
About Jon Medved
I’m the CEO and Founder of OurCrowd, the global equity investment platform that gives individual accredited investors access to private market startup deals alongside top-tier VCs. If you are an investor, private family office or financial advisor, follow me on Twitter or on LinkedIn where I publish a biweekly commentary. I welcome your comments in the response section.