From planning your holiday itinerary to giving you functional lines of code, the artificial intelligence (AI) sector is gaining unprecedented attention thanks to the runaway success that is OpenAI's ChatGPT. Thanks to Microsoft's US$10 billion investment in OpenAI, it's safe to say that the investment is paying off as ChatGPT is slowly becoming a household name for maximising efficiency and making once-impossible tasks possible.
Suppose you're keen to get on the AI bandwagon but don't want to participate in the overcrowded trade of buying into Microsoft. In that case, don't fret -- our guide to investing in artificial intelligence stocks besides Microsoft will inform you about alternative top AI companies that rival the ChatGPT giant. From the up-and-coming Google Bard to foreign competitors like Alibaba, here are our picks for the biggest and best AI stocks to add to your artificial intelligence stocks watchlist.
What is AI?
As a term originally coined by Stanford Professor John McCarthy in 1955, Artificial Intelligence is defined as the science and engineering of making intelligent machines. This is done with the eventual goal of getting machines to perform complex and cognitive tasks.
Contrary to popular belief, the world's fascination with artificial intelligence dates back to 1950 with the introduction of the Turing test and Alan Turing's famous "Can Machines think?" question. Such introspection helped shape the foundations of artificial intelligence and its philosophy. Fast forward to today and we once again see artificial intelligence take centre stage in the rapidly progressing world of technology. This is thanks to OpenAI's public showings of its AI technology that showcase the prowess of machine learning. These include dominating human opponents in DOTA 2 in 2017 and releasing ChatGPT to the public in 2022.
Now that we know how AI came to be, let's move on to understand its importance in today's tech industry. According to an industry analysis report by Grand View Research, the global AI market size is expected to reach US$733.7 billion by 2027, expanding at a compound annual growth rate of 37.3% from 2023 to 2030. Given OpenAI's established lead in the sector, it's likely that Microsoft is the crowd favourite for pocketing the lion's share of the growth.
The Dangers of an Overcrowded Trade
However, investors should take note of the dangers when participating in a crowded trade. For example, if OpenAI revealed that its learned language model is flawed during a public demonstration like what happened with Google's Bard, it could potentially lead to a significant dip in share prices as everyone rushes to exit their positions. Ultimately, it's why investors are always encouraged to stay diversified, especially in an emerging sector that's full of unknowns.
Fortunately, for those keen on investing in artificial intelligence, there are plenty of other big names in the AI sector that could be just as lucrative. Here are some of the top AI companies ranked according to their market capitalisation as of 9th May 2023.
Mega Cap AI Stocks (>US$200B)
1. Alphabet (GOOGL)
Market Cap: US$1.344T
We can't talk about the best AI stocks without including the second most popular AI model in the space today. While it has had a rough start, Alphabet's Bard AI technology is a promising contender in the artificial intelligence space, with the potential to become a serious rival to OpenAI's ChatGPT. Developed by Google Brain and Project Magenta, Bard is an open-source language model that can generate text from prompts and is powered by Google's Language Model for Dialogue Applications. By leveraging upon machine learning, Bard has been trained on large datasets such as books and Wikipedia articles to learn how human language works, making it capable of understanding complex concepts like emotions, relationships between words and even humour. With its impressive capabilities, many believe that Bard could eventually overtake the current king of AI - ChatGPT - if given enough time to refine its models further.
2. Nvidia (NVDA)
Market Cap: US$708.39B
Nvidia is one of the top AI companies on the market today because their graphics cards have made the artificial intelligence revolution possible. The company's graphics cards are popular among gamers and professionals alike for their high-end performance capabilities. This aside, they also have an essential role to play in powering artificial intelligence and machine learning. Nvidia GPUs offer unparalleled computational power that can be harnessed for advanced AI tasks such as deep learning, natural language processing, and more. With their powerful processors and massive memory bandwidths, Nvidia's graphics cards are essential in powering the rapidly advancing technology of artificial intelligence today and running complex AI algorithms quickly and efficiently. Thanks to its industry-leading processing technology, Nvidia has helped the AI sector to make breakneck progress as we increasingly see more developments in the artificial intelligence world. This has also been reflected in its stock price as NVDA shares have been on a tear since the introduction of AI chatbots like ChatGPT to the public.
3. Tesla (TSLA)
Market Cap: US$539B
Tesla is one of the top AI companies today and achieves this praise for good reason. Tesla's full self-driving beta marks a major breakthrough in the field of artificial intelligence, utilising end-to-end AI from images to enhance its self-driving system. By doing so, Tesla's cars can detect objects such as other cars and pedestrians and analyse changes in lighting and terrain. Additionally, the AI can recognise traffic signals and road markings, allowing it to make decisions about when to brake or accelerate accordingly. Furthermore, by leveraging sophisticated machine learning algorithms, Tesla's autonomous vehicles can learn from their experiences on the road and adjust their behaviour accordingly for improved performance. This powerful combination of artificial intelligence and deep learning has enabled Tesla's vehicles to achieve levels of autonomy previously thought impossible.
Besides gaining full autonomy when driving, Tesla is also working on a prototype Tesla robotic humanoid. Named the Tesla Bot, Tesla is designing its ambitious robotics project to be highly efficient and able to perform complex tasks quickly and accurately. Once in full swing, the Tesla Bots will be able to autonomously navigate their environment, detect obstacles, identify objects, and pick up items with precision. By leveraging these capabilities, Tesla's AI robots help streamline production processes while ensuring accuracy and efficiency at all times. Additionally, they can reduce costs associated with labour by taking on more challenging tasks that would otherwise require manual intervention from humans. This could lead to a significant increase in productivity for any company utilising this cutting-edge technology.
4. Alibaba (BABA)
Market Cap: US$215.6B
Alibaba's ChatGPT rival, Tongyi Qianwen, is a powerful artificial intelligence platform that can understand and respond to human conversations in real time. The technology developed by Alibaba’s AI Lab leverages natural language processing (NLP) algorithms to enable users to interact with digital services via voice commands or text messages. It also has advanced capabilities such as sentiment analysis and intent detection, which allow it to interpret user input and provide personalised responses accordingly and accurately. Also, Tongyi Qianwen uses machine learning models that continuously improve their accuracy over time to understand user queries better, even when they are expressed using different words or phrases. This makes it an ideal solution for powering chatbots and virtual assistants as well as providing more intuitive experiences for customers interacting with AI-enabled services today. Currently, Alibaba has stated that they're working on integrating Tongyi Qianwen across all business applications in Alibaba's ecosystem. From summarising meeting notes and writing emails to drafting business proposals and promoting campaign plans through simple prompts, Tongyi Qianwen looks to be a do-it-all AI tool that excels at maximising business efficiency.
Large Cap AI Stocks (>US$10B)
5. Salesforce (CRM)
Market Cap: US$193.74B
Salesforce is also one of the top AI companies, having made contributions to the field through their introduction of Einstein and SlackGPT. The AI-powered platform Einstein has been developed to help businesses quickly respond to customer needs by leveraging natural language processing algorithms. This allows it to understand user input better and provide real-time personalised responses. Recently, Salesforce also introduced SlackGPT. It's a powerful generative artificial intelligence tool that can accurately interpret conversations between team members and automate mundane tasks related to communication management. Such productivity-enhancing duties include drafting meeting minutes and crafting emails. With these two innovations, Salesforce has become a pioneer in the customer relationship management sector for being the first to leverage artificial intelligence’s untapped power.
6. Baidu (BIDU)
Market Cap: US$42.82B
Baidu initially created a stir in the tech world when it introduced its proprietary AI, the Enhanced Representation through Knowledge Integration Bot or, in short, Ernie Bot. With the media claiming it as the ChatGPT of China, Baidu's Ernie Bot certainly has big shoes to fill. Thankfully, Ernie Bot has one of the top tech companies behind it and is definitely up to the challenge of one-upping its competition. By leveraging natural language processing algorithms, Ernie Bot can accurately interpret user input and provide personalised responses accordingly in real-time, thanks to its advanced capabilities like sentiment analysis and intent detection. Although Ernie Bot sounds like a ChatGPT copy, it does have some areas where it outperforms Microsoft's generative AI tech. In a recent test by SCMP, Ernie Bot showed that it was capable of offering more accurate reports of current events and could generate images from text prompts. However, it chose to avoid queries that were political in nature. While we've yet to see the full capabilities of Ernie Bot, it'll definitely be exciting to observe how Baidu intends to bring the most out of its generative AI tech.
7. Palantir (PLTR)
Market Cap: US$15.69B
If you're a frequent reader of tech headlines, you'll likely have come across Palantir striking a deal with the government and securing a contract. As one of the top AI companies in the world, Palantir is a leader in developing cutting-edge artificial intelligence technology. Founded by Peter Thiel, this software company specialises in data analysis solutions that aid organisations in gaining valuable insights from their data as efficiently as possible. Their flagship product, Palantir Gotham, uses advanced algorithms to automate manual processes such as data integration and analytics so businesses can focus on making informed decisions based on accurate information. They also offer an AI platform called Palantir Foundry which leverages natural language processing algorithms to help users interact with digital services via voice commands or text messages. With powerful tools like these at its disposal, Palantir is helping shape the future of business operations today through artificial intelligence.
Mid Cap AI Stocks (>US$2B)
8. UiPath (PATH)
Market Cap: US$7.51B
UiPath is one of the world's leading AI companies, and its AI Centre technology is revolutionising how businesses operate. UiPath's AI Centre is an end-to-end automation platform that leverages machine learning and artificial intelligence to automate mundane tasks for businesses. By making use of its powerful analytics capabilities, UiPath helps enterprises to optimise workflows and streamline resources so employees have more bandwidth to focus on more strategic activities. The technology also enables natural language processing (NLP) algorithms so users can interact with digital services via voice commands or text messages. Additionally, UiPath includes a robotic process automation (RPA) layer, which helps automate document processing and improves business processes while reducing the amount of manual labour required.
9. C3 AI (AI)
Market Cap: US$2.09B
C3 AI is one of the top AI companies and a leader in developing cutting-edge artificial intelligence technology. This software company, founded by Tom Siebel, specialises in providing enterprise solutions that leverage machine learning and predictive analytics to help organisations gain valuable insights from their data quickly and easily. The C3 AI Suite provides users with powerful tools such as natural language processing algorithms, robotic process automation, advanced analytics capabilities and more. This suite of products makes it easier for businesses to make informed decisions based on accurate information while maximising efficiency. Additionally, C3 AI's platform can be used to automate mundane tasks so employees can focus on more strategic activities - making it an invaluable tool for any organisation looking to stay ahead of the competition in today’s rapidly changing business landscape.
The Bottom Line
The potential of a fully developed artificial intelligence sector is immense as more competitors rise up to challenge ChatGPT. With the emergence of Ernie Bot, Einstein and more, we're seeing more businesses strive to equip themselves with the latest in AI technology that uses machine learning and predictive analytics to make informed decisions faster than ever before. As we move forward into an increasingly digital world where data has never been more valuable or accessible, investing in the best AI stocks today could be wise for those looking to capitalise on this fast-growing industry.