How Savvy Retail Investors are Fueling the Explosive $1.59 Trillion AI Industry

With the rise of ChatGPT and similar artificial intelligence (AI) tools on the horizon, the AI market has massive potential.

A report from Precedence Research estimates the global AI market will grow to over $1.59 trillion by 2030. That number represents a 38.1% compound annual growth rate from 2022, which might prove low given AI’s expected role in most facets of everyday life.

For investors looking to capitalize on this trend, startups like RAD AI have already raised over $3.1 million from retail investors. RAD AI has created the first AI marketing platform built to understand emotion. To invest in RAD AI, Click here.

Alphabet Inc. plans to integrate its generative AI into Google Workspace and its suite of collaboration and business tools, including Gmail and Google Meet. In AI, “generative” means a platform that can create new and original content, whether it’s country music lyrics or a model of a new automotive part.

The AI algorithm enables it to pull from massive data sets to create something out of the user’s provided parameters. Alphabet’s stock rose on the March 15 announcement, a day when the broader market declined because of the ongoing banking crisis. In February, Alphabet announced a $400 million investment in Anthropic, which recently launched its chatbot Claude to rival ChatGPT. Company representatives note Claude is “much less likely to produce harmful outputs,” “easier to converse with” and “more steerable” than ChatGPT, a claim millions of users will soon put to the test.

Where one tech giant operates, the others are also in the mix. Microsoft Corp. has a $10 billion multiyear partnership with OpenAI — the company behind ChatGPT — that includes Microsoft Azure as the exclusive cloud partner for the AI tool. Microsoft integrated ChatGPT into its search engine Bing to make inroads into Google’s search dominance and provide users with a new AI-powered experience. OpenAI announced the latest version of its chat platform, GPT-4 on March 14, which helped boost Microsoft’s share price.

VC Funding Slowed Even For Red-Hot AI Firms

Despite the AI market’s rapid growth and limitless potential, venture capital (VC) funding for AI is slowing. Global AI startup funding fell to $8 billion in the third quarter of 2022. Some of the slowdown was a natural correction from the outsized investments during the 2021 pandemic-driven record VC investment. The rise of retail investors and the growth of equity crowdfunding also explain VC’s lowered involvement, as companies can turn to individual investors to raise considerable sums. During 2022, VC funding slipped across the board because of rising interest rates and economic uncertainty.

In 2016, the investing landscape shifted with the Jumpstart Our Business Startups (JOBS) Act, which enabled anyone to invest in startups. Previously, individual investors — outside of the very wealthy — could not invest. The legislation created the equity crowdfunding market led by firms like Wefunder, StartEngine and Republic.

VC funding continues to wait for a rebound as broader the stock market decline and higher cost of capital restrict funds’ willingness to invest. AI startups like RAD AI are not waiting for VC funding to capture market share. Instead, the company turned to the crowd to present retail investors with a unique opportunity with its offering on Wefunder. For investors looking to get involved and invest in RAD, Click here.

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