Artificial intelligence is disrupting the graphic design industry, creating lucrative investment opportunities.
DALL·E, the AI system that creates realistic images and art from a description in natural language, continues to have profound implications for advertising, media distribution, and entertainment. The model was made available in beta last month, when the company began the process of inviting 1 million people from its waitlist over the coming weeks.
Beta users receive 50 free generations per month and will be able to purchase 115 additional generations for $15. Each generation will produce four images for approximately $0.03 per image. According to ARK Invest’s estimates, the compute cost to generate an image — the inference cost — is roughly $0.005 per image, suggesting a business model with 80%+ gross margins, in line with best-in-class SaaS companies, ARK wrote in a recent newsletter.
Like still-image AI systems, the new DALL·E 2 model enables video with text-based commands. The model can create videos of a tennis player playing on the precipice of a volcano or in the middle of the desert, Brett Winton, director of research at ARK Invest, wrote in a recent newsletter.
“Conceptually, video should follow advances in still imagery. Given ARK’s forecasts for steep declines in AI training costs and ramps in hardware investment, we can estimate how much video costs might lag behind still-image costs,” Winton wrote. “As discussed in ARK’s Big Ideas 2022, we expect AI training costs to drop 2.5x per year through 2030 and AI hardware spending to double annually through 2025, at least. The combination suggests that the capability of AI systems will improve multiple thousand-fold over the next five years.”
To understand the difference between generating a 30-second video compared to a still image, consider this: A television advertisement has roughly 2,000x more pixels than a still image created by DALL·E 2, according to Winton.
“With that ratio as a proxy, we believe that 30-second AI videos will be as productive and provocative by 2026 as are AI still-image generation systems today,” Winton wrote.
“Why spend $100,000 on a single television commercial targeting millions of people when, with the same budget, an advertiser will be able to create 10,000 different commercials, each tuned to a cluster of like-minded viewers at a moment in time?” Winton added.
Investors looking to gain exposure to the lucrative AI industry should consider the ARK Autonomous Technology & Robotics ETF (ARKQ). Companies within ARKQ are focused on and are expected to substantially benefit from the development of new products or services, technological improvements, and advancements in scientific research related to, among other things, energy, automation and manufacturing, materials, artificial intelligence, and transportation.
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