Here are my laundry list of AI companies (public and private) as per my understanding about AI ecosystem
Hardware/Semis (1st order derivative): NVIDIA, AMD, SMCI, ASML. TSMC —> Direct beneficiaries of AI boom
AI Software Infra (2nd Order derivative): All cloud/edge computing vendors, like MSFT, AMZN, Google, Cloudflare (Nvidia’s 40% revenue comes from these companies)
AI software middleware (3rd order derivative): Snowflake, Confluent, MongoDB, Elasticsearch, HuggingFace (private), Cohere (Private), LongChain (Private), Antropic (private), Wix etc…
AI adopters (Top of the value chain, 4th order derivative) : Meta, ByteDance, Trade Desk, Crowdstrike, Palantir, Upstart, Lemonade, UIPath, Pinterest, Biotech(like DNA sequencing/editing companies) and thousands other enterprises/future apps built with 1st – 3rd order derivatives
I started investing in some of these companies in 2019 (few of them came in the public market in 2020-21). Added more during the 2022 bear market when they were available at throwaway prices. Now I have stopped putting new money into these companies. Of course these companies (specially middleware companies) are not out of risk. Beside competitions with peer groups, many of them actually created their own enemy with their free open source counterpart. As a result when push comes to shove (i.e. during cutting cost for survival in this inflationary environment) customers adopt the same free open source software which cannibalizes their top line growth. So please do your due diligence before investing in these companies.
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