THNQ Tank: AI Index and Ecosystem Summer Highlights

Outside of all the noise, the near weekly new announcements of groundbreaking, benchmark-climbing AI models (Llama 3.1, Mistral Large 2), what’s happening under the hood in AI is a rapid expansion of capabilities and applications across various sectors. From autonomous vehicles to enhanced cybersecurity, AI is quietly revolutionizing industries and solving complex problems. The core developments in language models, computer vision, and specialized AI tools are driving this transformation, with companies like Alphabet, Shopify, and Datadog leading the charge in their respective domains.

Pure Storage Pure//Accelerate 2024 – At Pure//Accelerate 2024 Event

Storage introduced its AI Copilot tool, which uses natural language to simplify storage management and enhance cybersecurity, and launched new anti-ransomware solutions, including AI-powered anomaly detection.

It also unveiled three advanced storage-as-a-service (STaaS) offerings: Cyber Recovery, Optimization, and Site Rebalance, each with specific service level agreements (SLAs) to ensure performance and reliability. These solutions are in prime positioning to enhance and benefit from AI adoption.

We covered more on Pure Storage, here, on a previous THNQ Index Company Spotlight

Alphabet’s (THNQ) Waymo division announced that Waymo One autonomous ride-hailing is now fully available to the public of San Franciso. While most of the focus of AI has been directed toward (with good reason) LLM progression — of which we’re seeing incredibly rapid progression of state of the art (SOTA) models across multiple domains, including vision and biology — autonomous vehicles will redefine how society moves. Overnight logistics will de-clog daytime. People will be able to use vehicles more as public transit, rather than a luxury, which could redefine cities and suburbs.

Speaking of Alphabet, I (Zeno) saw “The Thinking Game” premiere at the Tribeca Film Festival on June 7, offering a fascinating glimpse into Demis Hassabis’s (Co-founder of DeepMind) journey with the company that was acquired by Google for ~$500 million in 2014, and the evolution of AI — from game-playing algorithms to protein-folding breakthroughs.

The film underscored how AI has been quietly revolutionizing various fields for years, but recent advancements hint at a future where AI could tackle some of humanity’s most pressing challenges in healthcare, climate, and beyond.

Datadog (THNQ) DASH 2024 Conference Highlights:

Datadog’s DASH 2024 conference in New York City showcased the company’s robust innovation pipeline across its core observability platform and emerging growth vectors, reinforcing our Buy rating and price target.

These moves not only expand Datadog’s total addressable market but also present significant cross-selling opportunities to its existing customer base. Notably, AI-native customers now represent 3.5% of total ARR, up 50 basis points quarter-over-quarter, indicating early traction in this high-growth segment.

The company’s core observability business also saw meaningful enhancements, including Kubernetes Autoscaling for cloud cost optimization and advanced log analytics capabilities, which are already generating over $500 million in ARR.

While Datadog’s expansion into adjacent markets like AI monitoring and security presents exciting growth opportunities, it also introduces execution risks as the company faces established competitors in these spaces.

THNQ Index Member MongoDB Launches AI Applications Program

In late July, MongoDB launched the AI Applications Program (MAAP), offering a comprehensive toolkit for rapid AI development. MAAP addresses complex data management challenges with integrated tech stacks and partnerships with AWS, Google Cloud, and Microsoft Azure. The program provides reference architectures, professional services, and learning resources, catering to both technical and nontechnical teams. Early adopter Anywhere Real Estate praised MongoDB’s support in AI integration. MAAP positions MongoDB as a key enabler in the AI revolution, helping businesses quickly leverage AI advancements across various platforms and LLMs.

Other Recent News from AI Ecosystem:

1. OpenAI Founder Launches Safe Superintelligence Inc.
2. Open AI Launches “SearchGPT” to compete with Alphabet Google
3. Musk to Launch AI Supercomputer in Memphis, Tennessee (my hometown)
4. SpaceX MINI has a smaller form factor and less power draw. It can fit in backpack.
5. Apple Won’t Roll Out AI Tech in EU Market over Regulatory Concerns — could see hurdles in its AI launch in the EU due to the Digital Markets Act (DMA), which could impact the “AI will sell more iPhone” story in EU as well as potential take-rates on the App store, which could hurt topline and margins. Additionally, as seen on Monday, June 24, the announcement of EU Regulators accusing Apple of violating the DMA (first company to be charged). Fines can reach up to 10% of global revenue. China also faces hurdles in AI implementation and will probably face concessions.
   1. If you’ve been following along our research, we’ve been calling out the risks of the DMA and other AI regulations on many cores business models’ monetization and regulatory/reporting requirements.
   2. Apple, which has recently seen a run-up based on its AI announcements and hopes that it will see material impact to offset its now-multiple stagnant years and slight declines of core revenues. A China rebound is far from a shoe-in, and the company is facing antitrust issues in the U.S. as well.
   3. I first commented on the potential DMA impact on megacap names back in our Q3 2023 THNQ Index Commentary
   4. New York’s SAFE for Kids Act is first of its kind in the U.S. It requires parental consent for algorithmic feeds and data collection for minors; restricts notifications at night; mandates chronological feeds; and imposes fines for violations, aiming to protect youth from addictive social media content. It explicitly prohibits online sites from collecting, using, sharing, or selling personal data. This could impact META, SNAP, and others that have large younger audience bases that monetize these efforts, especially if this catches on across other states, or even at the federal level.

For more news, information, and analysis, visit the Disruptive Technology Channel.