The Unlikeliest AI Alliance Presents Under-the-Radar Opportunity
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| By Jon Markman |
The battle for open source artificial intelligence has a new champion. Surprise, the companies leading the charge are unexpected.
In December, Meta Platforms (META) and International Business Machines (IBM) announced the formation of AI Alliance — an international consortium of developers, researchers and tech companies to build a safer, open AI platform.
Of the enormous list of 50 founding members, one should catch your eye right now. But first, let’s look at why this new alliance is necessary …
Elon Musk claims that he came up with the name and concept for OpenAI because … of course he did! But that’s not all he had to say.
The outspoken CEO of Tesla (TSLA) told a CNBC interviewer last May that he was uneasy about the development of AI. Specifically, he worried that too much of the foundation of this important new technology was being concentrated in Alphabet (GOOGL) subsidiaries.
Google was hiring all the best people and building technologies that were largely walled off from the development community. OpenAI was supposed to be an open source alternative.
It has not turned out that way.
In 2019, Microsoft (MSFT) invested in OpenAI … and everything changed.
The company stopped sharing its data with the open source community. OpenAI is now on track for an initial public offering. According to Crunchbase, the private company is currently valued at least $80 billion.
An “Open” Alternative
Enter AI Alliance, a company championed by Mark Zuckerberg, the founder of Meta Platforms.
AI Alliance is a curious consortium. The alliance was launched in December with 50 founding members. This is a wild list.
It includes major public companies like Advanced Micro Devices (AMD), Dell Technologies (DELL), Intel (INTC), Oracle (ORCL), ServiceNow (NOW) and Sony Group (SONY).
It includes academia members like Cornell, Dartmouth, the University of Notre Dame and Yale.
Finally, it has many other organizations known for their big brains like CERN, NASA and Cleveland Clinic.
It is a collection of Ivy league academics, rocket scientists at NASA and big companies that are not named Nvidia (NVDA), Microsoft, Amazon.com (AMZN) and Alphabet.
Getting this many varying interests in the same room is no small feat. However, the cooperation is much more important because it is the foundation for a framework that could eventually compete with Nvidia’s software/hardware ecosystem.
A statement from founding members posted at Meta claims that the alliance will bring together leading developers, scientists, academic institutions, companies and other innovators to pool resources and knowledge to build a better platform for sharing and developing AI solutions.
It is no accident that this seems vaguely familiar to the vision Musk planned when he became an early investor in OpenAI. It is an alliance that claims to decentralize the development of AI … removing it from the firm grasp of Alphabet, Nvidia and Microsoft.
This is ambitious. Given the firepower of its members, the AI consortium might become a viable alternative to walled garden AI ecosystems at OpenAI, Microsoft, Google and even Tesla.
If so, there might be a company in that list of early members that’s flying below your radar right now … but shouldn’t be.
Who’s Building AI?
Sony is not often the first company many associate with AI. The Japanese company, after all, makes the world’s best camera sensors.
Long before the current AI gold rush, Sony executives began to build out a strategy to make AI a major revenue stream. The investment started with the acquisition of Cogitai, a tiny California startup that made software to help real-world machines learn continually and autonomously using AI.
Bringing Sony AI-enabled sensors to the physical world would be a big new business. Ensuring that tech is a plug and play with other AI tech would be a homerun.
That’s why the Sony involvement in the AI Alliance is important.
At a share price of $93, Sony stock trades at 16.6 times forward earnings and 1.3 times sales. This is extremely cheap given the firm’s dominant position in optical sensors.
With the rollout of AI, these sensors will ultimately help vehicles, traffic infrastructure and other machines to see the world.
Before others realize its key inclusion into this new open source alliance, you might very well have a chance to lock in a wildly alternative AI goldmine.
All the best,
Jon D. Markman
P.S. The convergence of these disparate ventures, companies, universities and even government agencies seems wild. But such things happen. In fact, a colleague recently discovered not one, not two … but three events converging in the next few weeks that could yield a return of 200x or more. Check it out here.
