Cathie Wood, CEO of Ark Investment Management, has identified software as the emerging star player in the field of Artificial Intelligence (AI). More often, we are seeing software companies outperform their hardware counterparts. According to Wood, this shift mirrors the trend throughout the wider technology industry. Machine and deep learning technologies are key growth catalysts within the software industry. Driven by these technologies, software companies may soon outrank hardware companies in market value and revenue.
Software companies have the capacity to better address customer needs and problem-solve real-world issues. Both these factors further secure their potential domination in the AI industry. Ark Venture Fund has backed numerous AI software companies, such as Anthropic and OpenAI, alongside Elon Musk’s secretive start-up, xAI. Their investment portfolio also includes shares from Palantir Technologies, among others. The fund continues to strategically commit to various AI projects, such as SambaNova Systems and Kensho.
Global tech giant, Amazon, utilizes AI across many of its business sectors.
Software dominating hardware in AI market
It’s especially prevalent within its primary e-commerce function, optimizing sales via a recommendation algorithm on Amazon.com. Other examples include AWS, Alexa, and Rufus, Amazon’s virtual shopping assistant. This wide-reaching use of AI underlines Amazon’s drive to set the tech innovation agenda. Their continual limit-pushing application of AI, into areas such as predictive analytics and drone delivery technology, maintains their competitive edge in the technocentric market.
Notably, Amazon Web Services (AWS) is a segment of Amazon pioneering forward in expanding AI strategies. It has developed data center chips, launched a new selection of large language models (LLMs) called Titan, and designed a virtual assistant, Amazon Q. These innovative products and tools further establish AWS as a leader in the AI market.
Meta Platforms, owner of various popular social media platforms, stands to gain from these AI software trends. Improved user interaction and advertising potential, attributable to their significant AI integration, could lead to a momentous increase in revenue. A continuation of their AI investment could further solidify their standing in the tech industry and lead to untapped growth.
The shift towards software as the superior opportunity within AI may herald a new era in the technology sector. Predictions suggest this could advantage investors of established companies such as Amazon and Meta.
