Shulou(Shulou.com)11/24 Report--

According to news in the morning of February 8, Beijing time, retail investors are flocking to small-cap companies dedicated to building artificial intelligence tools as large technology companies, including Google's parent company Alphabet and Microsoft, scramble to take the lead in the next big growth driver.

The huge success of ChatGPT has shifted Wall Street's focus to artificial intelligence technology, reminiscent of investor hype about blockchain a few years ago, when the share prices of almost all companies associated with the technology soared.

C3.ai, an artificial intelligence software company with a market capitalization of $3 billion, ranked fifth among the most actively traded stocks on Fidelity's small investor platform on Monday, and attracted $31.4 million worth of daily retail inflows, according to Vanda Research. The stock fell 14.7% on Tuesday, but has risen about 140% so far this year.

Matthew Tuttle, chief executive of Tuttle Capital Management, said of the reasons behind retail investors' focus on small-cap companies: "artificial intelligence in small-cap companies accounts for a much larger proportion of their business than large companies." Tuttle said he shorted C3.ai 's stock about a week ago, but now he wants to be long.

Shares of SoundHound AI, which provides voice artificial intelligence platforms, and Guardforce AI, a Thai security company, have more than doubled so far this year, while analyst firm BigBear.ai has risen eightfold.

On a recent trading day, SoundHound AI shares fell about 14.9 per cent, while BigBear.ai fell 18 per cent, while Guardforce AI fell 3 per cent. Shares of Microsoft, which invested in OpenAI, the parent company of ChatGPT, closed up about 4.2% after the tech giant launched Bing search on ChatGPT.

The new Bing chat robot, which the company calls "an artificial intelligence-driven web robot", will help users improve queries and even draft and translate emails.

Alphabet, Google's parent company, also said on Monday that it would launch a chat robot service called Bard, as well as more artificial intelligence tools to power its search engine and improve the user experience.

Raimo Lenschow, an analyst at Barclays, said Microsoft was in a strong position in the artificial intelligence competition because of its close partnership with OpenAI and the combination of Azure capabilities around computing and data.

"if you want to invest in artificial intelligence, you should be aware of the fact that these small companies are competing with super-large companies, while large companies have the scale, efficiency and capital to dominate the field," says Callie Cox, an eToro fan tomato. He added that investors have been very interested in artificial intelligence recently.

Earlier, Baidu said it would complete an internal test called Ernie Bot, a project similar to ChatGPT, in March this year. Baidu's shares rose 9.9% on Tuesday after the announcement. Earlier in the day, the shares of a number of Chinese artificial intelligence companies also rebounded.

Zhao Chen, chief global strategist at Alpine Macro, said: "the market is now trying to find the next big event to lead the market in the next 10 years, and artificial intelligence is like this. Investing in this technology may be a bit of an investment, but everyone thinks it will be an important technology in the future."

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