Small Caps | May 02 2023
By Tim Boreham
The artificial intelligence (AI) revolution is shaping up as the most profound technology development since the invention of the internet – and it’s naturally one that investors will be discussing with their financial advisors (or, ironically, Chatbot).
Currently, the ASX-listed AI sector can be split between tech providers developing AI tools and non-tech companies – anything from miners to bankers – using AI to improve their existing business.
Plenty of hype and trumped-up claims are emerging, so investors need their old-fashioned BS detectors on a high setting. Even ChatGPT cautions that AI is a relatively new field and “subject to rapid changes and technological disruption, which could impact the performance of AI companies in the future.”
One intriguing AI pioneer is Brainchip Holdings ((BRN)) which is commercialising Akida, a neuromorphic process to provide and improve data to develop machine learning and AI products.
It’s also got something to do with ‘spiking neural networks’ and good on them – with a $680m market cap investors are convinced about the prospects of the company which is generating some revenue, but also deep losses.
Valued at $1.2bn, Weebit Nano ((WBT)) develops “resistive Random-Access Memory technologies which are a specialised form of non-volatile memory for the semiconductor industry.”
Weebit has just raised $60m via a placement and “upsized and scaled-back” share purchase plan, so once again there’s no shortage of investor confidence.
With a $340m market cap, Nuix (NXL) provides investigative analytics and intelligence software with a charter of “finding truth in a digital world”.
The truth is out there - but in the zeros and ones rather than at a Roswell UFO convention.
At the sub $100m market cap end, how do investors leverage a theme that – as with the dial-up internet - is likely to evolve over time?
The company behind much of the broadcast captioning both here and the US, AI Media ((AIM)) uses extensive AI to enable seamless translation, even if the speaker is a Russian crime boss with a dodgy accent.
The company is transitioning customers from its old iCap product to its AI-driven platform called Lexi. The key difference? Lexi doesn’t need a human with a familiar voice to repeat the words into a speech recognition program.
According to founder and CEO Abrahams, the way audio is delivered into a speech recognition program is a “massive determinant” of the accuracy of the caption. “We will mic up a commentators booth with isolated audio and no background noise,” he says.
The company has dozens of automated speech recognition engines, selected according to the accent or language and the type of setting (such as a horse race versus a news broadcast).
AI Media reported flat revenue of $29.7m for the half year to December 2022. But earnings before interest, tax depreciation and amortisation (ebitda) was $1.4m, partly the result of upgrading customers to Lexi.
AI Media’s customers include Foxtel, Al Jazeera, SBS, Google, Channel Seven and Major League Soccer.
The company also won contracts for the cities of San Francisco, Austin and Baltimore and is eyeing expanded opportunities in parliaments and court rooms.
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