Artificial Intelligence: A Booming Industry in Australia
Artificial intelligence (AI) is rapidly transforming industries and daily life, and Australia is no exception. The Australian government has recognized the potential of AI and is actively investing in its development and adoption. In the 2023/2024 fiscal year budget, AU$101.2 million was allocated to boosting AI, with AU$17 million earmarked for establishing up to five AI Adopt Centres specifically tailored to help small- and medium-sized businesses leverage AI’s benefits. This investment emphasizes the strategic importance of AI for Australia’s economic future.
Key Takeaways:
- Government investment: Australia is showing its commitment to AI with a sizable investment program, aiming to boost development and adoption across various sectors.
- Emerging Market: While the AI market in Australia is still relatively small, it’s experiencing significant growth, attracting interest from investors.
- ASX Opportunities: Several ASX-listed companies are leading the way in AI development and application, presenting intriguing opportunities for investors seeking to capitalize on this burgeoning sector.
Exploring Top ASX AI Stocks
To provide investors with insights into potential AI investments on the ASX, the Investing News Network has identified five prominent companies based on their market cap and focus on AI.
H2: NextDC (ASX: NXT)
Company Profile: Company Profile
Market Cap: AU$10.28 billion; Current Share Price: AU$17.11
NEXTDC is a leading data center operator in Australia, with a growing network of 13 operational centers spanning Australia, New Zealand, Malaysia, and Japan, and an additional nine under construction. The company is actively engaging in partnerships with businesses and academic institutions to bolster Australia’s digital infrastructure.
Last September, NEXTDC announced a partnership with La Trobe Business School’s Research Centre for Data Analytics and Cognition to delve into the future applications of AI across diverse industries. On August 6, NEXTDC achieved NVIDIA’s DGX-Ready Data Center Program certification, streamlining the deployment of NVIDIA’s AI platforms and enhancing its ability to offer advanced AI data centers within Australia. This certification empowers NEXTDC to guide Australian organizations in implementing digital infrastructure tailored for NVIDIA’s AI technology, offering access to NVIDIA’s infrastructure solutions to address the challenges inherent in AI infrastructure.
H2: BrainChip (ASX: BRN)
Company Profile: Company Profile
Market Cap: AU$368.12 million; Current Share Price: AU$0.19
BrainChip is renowned for its innovative akida, a digital neuromorphic chip that operates on a spiking neural network, mimicking the communication patterns of neurons in the human brain. By integrating AI directly into the chip, akida enables self-learning capabilities without relying on external networks or cloud services, enhancing security and reducing latency.
On June 5, BrainChip released a white paper outlining its new technology called TENNs-PLEIADES, an efficient AI processor capable of handling complex tasks like decision-making, object recognition, and data analysis. Unlike akida, this chip is designed for spatiotemporal classification and detection using event-based data, proving particularly well-suited for low-latency applications such as self-driving vehicles.
H2: Appen (ASX: APX)
Company Profile: Company Profile
Market Cap: AU$244.19 million; Current Share Price: AU$1.10
Appen initially emerged in 1996 as an automated speech recognition startup in Sydney. Today, it has evolved into a trusted partner for businesses seeking to implement AI solutions. The company offers a suite of industry-specific large language models and AI-training products.
In recent years, Appen has faced challenges in retaining its market share as the popularity of generative AI has surged. In January, its long-standing partner Alphabet (NASDAQ: GOOGL) cut ties to focus on in-house AI development. This event, coupled with a significant decline in share price from its peak and revenue reduction in 2023, suggests potential risk for investors. However, Appen’s Q2 results, which showcased revenue growth and a positive month-on-month trajectory despite the loss of Google’s business, have generated positive sentiment and a corresponding share price response.
H2: Bigtincan Holdings (ASX: BTH)
Company Profile: Company Profile
Market Cap: AU$94.49 million; Current Share Price: AU$0.12
Bigtincan Holdings specializes in a sales platform that leverages AI to enhance customer experiences. The platform aims to streamline and personalize the purchasing process, making it more efficient for both businesses and consumers. Bigtincan boasts a robust partnership portfolio, including notable companies like Apple (NASDAQ: AAPL), Adobe (NASDAQ: ADBE), Salesforce (NYSE: CRM), and Microsoft (NASDAQ: MSFT). Its large language model, GenieAI, was launched in March 2023.
Bigtincan’s H1 fiscal year 2024 report showed that GenieAI started generating revenue during the period. The company also reported positive earnings before interest, taxes, depreciation, and amortization (EBITDA), demonstrating a 136 percent increase from the previous reporting period. The release of Bigtincan’s full fiscal year 2024 results briefing is scheduled for August 27.
H2: AI-Media Technologies (ASX: AIM)
Company Profile: Company Profile
Market Cap: AU$87.7 million; Current Share Price: AU$0.42
AI-Media Technologies is a global media access provider headquartered in Australia, with operations in four key regions: Australia and New Zealand, North America, EMEA (Europe, Middle East, and Africa), and Asia. Founded in 2003 by Tony Abrahams and Alex Jones, who is deaf, the company champions accessibility through AI-powered speech transcription services.
AI-Media Technologies utilizes AI to transcribe speech, making media accessible to all. The company has established itself as a leading global provider of captioning and translation services. AI-Media Technologies began trading on the ASX on September 15, 2020.
Investing in AI: Frequently Asked Questions
H2: What is artificial intelligence?
AI refers to the simulation of human intelligence displayed by machines. Recent advancements in graphics processing units (GPUs), characterized by faster and more powerful chips, have played a pivotal role in propelling the development of AI technologies.
H2: Where is AI used?
AI has been hailed as a core technology of the fourth industrial revolution, driving investment across a wide range of industries, including transportation, manufacturing, education, and agriculture. Some sectors anticipated to witness rapid growth in AI investment in the near future include healthcare, pharmaceutical research, retail, industrial automation, finance, and intelligent process automation.
H2: How to invest in AI stocks?
Investors seeking to capitalize on AI’s growth trajectory have several avenues to explore. Conducting thorough research and consulting with a broker is crucial for making informed investment decisions. The companies listed above represent a strong focus on AI. Investors can also explore companies that incorporate AI into their broader business models, providing indirect exposure to the sector. Examples of these companies on the ASX include Block (ASX: SQ2), WiseTech Global (ASX: WTC), Seek (ASX: SEK), and Xero (ASX: XRO).
For a more diversified approach, the Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ) provides an investment opportunity in companies involved in AI development worldwide. Investing in exchange-traded funds offers a cost-effective method to benefit from a sector without directly purchasing individual stocks.
Disclaimer:
This article is an updated version of an article initially published by the Investing News Network in 2020.
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Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
