Is Big Tech the Only Game In Town for AI/NLP Investors?

I believe voice computing and natural language processing (NLP) will disrupt several technology markets over the next few years. There are big obstacles in the way, but I am confident independent software vendors (ISVs) will step up to the task of removing them.

I like Ferraris, not too keen on Toyotas, Show me the Ferraris

Problem is very few of these ISVs are publicly traded. Fast Company published a list of players of interest to me back in March of 2017: “The 10 Most Innovative Companies in AI/Machine Learning”. The first 3 of these firms: Google, IBM, Baidu are public traded, but I don’t see how investing in any of these 3 would produce the gains, over the next 5 to 7 years I am after. The remainder of the list of companies are all private.

Contrast this dismal picture with the panorama presented by a hot Biotech opportunity for investors: CRSPR. If readers aren’t familiar with CRSPR I recommend a read of an article from Nature: CRISPR: gene editing is just the beginning. Retail investors can readily acquire positions in each of the 3 major players in this market today, without pulling teeth.

So why the difference? I’m not sure but suspect it has something to do with what I call “private company craze”. Early stage market leaders in the AI/Machine Learning markets are magnetizing lots of investments from folks willing to plunk money down on private investment opportunities. I’m not willing “to go there”. In all probability I’m not alone and lots of retail investors share my same take on the risks.

I have no choice, today, than to invest in one of the FAANM stocks, or the whole group: Facebook, Amazon, Alphabet, NVIDIA, Microsoft. Therefore, I’m sitting it out.

I also can’t help but suspect investors in the “private company craze” have convinced these early stage ISVs to grant them some penalties (menacing hooks) should they go public in any manner but the route these investors prescribe.

Too bad US financial regulatory agencies aren’t studying how “the craze” is contributing to the ever widening gap between the 1% and the other 99% of US investors.