Most Investors Will Miss These 20 Hot Tech Trends
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CB Insights has identified 20 hot tech trends for 2024, and we’re going to talk about them in under 15 minutes, because your time is valuable. From quantum computing, to retail loss prevention, we have all the trends that stand to benefit in 2024 and how to invest in them. If you’re a Nanalyze Premium subscriber and you’d like a copy of the CB Insights report, please send us an email and we’ll get it to you!
Experts say 20 Hot Technology Trends will dominate this year. Now I’ve been researching technology for decades and some of these were new to me. Today’s presentation is interesting, entertaining, and you’re going to learn something. 20 Hot Tech Trends in under 15 minutes. Wyatt, can you start the stopwatch? 3-2-1, go!
Startup Funding Dries Up
Unicorns need a new playbook to survive. So unicorn is a company that has a value on the private market, so it’s a startup, with a value of greater than a billion dollars. So here you can see funding going into startups and it’s quite low.
So Equity dollars and deals hit the lowest levels in six-plus years in Q4 2023. So this may be a leading indicator of where things are going this year. And what’s even more forboding is when you look at startup mortality it’s on the rise. They say as macroeconomic headwinds persist.
This is the number of publicly disclosed startup deaths in 2023: 309. You can see that trend moving upwards. That’s not good. Three companies here, large unicorns that didn’t sustain their valuations and are forced to close shop.
So I think we’ve covered all three of these. You can see our piece on Convoy. That was back in 2018. Certainly looked promising, was valued at upwards of $3.8 billion they had received $836 million in funding and now they’re all gone.
CB Insights, they’re the folks that put together the report we’re going to be reviewing today, they came up with these 20 Tech Trends and they identified remaining unicorns that could be short on cash and face valuation loss, M&A, or closure in 2024. So this year, they’re top-valued unicorns that haven’t raised in two-plus years and you can see through the list here a fair number of these we’ve covered in the past.
Now moving on to the second, and I’m just going to burn right through these. So the brain becomes a fierce Tech battleground. We all know about Neuralink, we’ve been seeing in the news about how they’ve implanted for their first patient, I believe they’re on patient number two now. But they’re not the only ones working on this. You see some other names here as well. And I thought this was rather interesting.
AI Tech Trends for 2024
So I recall, you remember that or you know that gentleman that sits there and talks about the Fountain of Youth, Brian Johnson character? He used to have a startup called Kernel and I remember it was fascinating learning that he said the way that your brain records memories is unique as your fingerprint and he said that they were at 80% of being able to write from the human brain.
And here you can see where they’re reading from the human brain with remarkable accuracy and essentially telling what you’re looking at just based on brain activity. Absolutely fascinating. So GPU shortage forces companies to be smarter. Companies are desperate for GPUs. You can see Elon Musk here saying GPUs at this point are considerably harder to get than drugs. And you see the estimated cost of making an H100 from NVIDIA and the markups just go up from there.
Now the answer here is to use this Hardware more efficiently and or create substitutes. So we see here a number of startups on the left: Photonics, Neuromorphic Computing, in-memory Computing, 3D chips, Etc. So these are rather promising Technologies either way, whether GPUs remain in strong demand or not. On the right, you can see companies working on making GPUs more efficient.
Now NVIDIA is probably paying pretty close attention here with the $31 billion cash on their books. Multimodal AI will rise on corporate’s wish list. So this is the idea that AI can process anything, whether that’s images, text, audio, video, or handwriting.
And ideally, it output, as well. So you may say take this set of documents and explain them in a video. So that’s where AI is moving. You can see here that Google introduced their first commercial model late last year which takes diverse inputs and then you have a number of other firms working on Commercial applications across industry vertical.
So that’s a trend, especially in healthcare, you can imagine, where reading imagery, for example, would be particularly useful. Synthetic data, we’re running out of high-quality data to train AI models.
On the right here, you can see the schedule for when they expect data to run out. They estimate by 2026, will exhaust high-quality text data for training LLMs. This is nothing new. So we’ve been looking at synthetic data as far back as six years ago and I’m speaking with companies that are working on this stuff.
And now the movement is said to be niche-focused. So you could see that targeting niche applications, for example, in health care or the Department of Defense could be useful. However, it could create some problems.
This recent paper, just weeks ago, Breaking MAD: Generative AI could break the internet researchers find. That training successive generations of generative AI models on synthetic data gives rise to self-consuming feedback loops. So that’s potentially problematic.
Do-it-yourself software development upends engineering orgs. This is if you are a nerd like me. I spent the first half of my career in software startups.
This is rather interesting. There’s a massive number of software Dev tools that have emerged to help developers. You can see some variations here. It says CB Insights tracks over 70 Tech markets related to Enterprise software development.
Very difficult to build good software. And here you can see this idea of AI co-pilots supercharging developer productivity, not replacing them.
And you could see GitHub co-pilot there at the top and other variations, what, tool from Amazon there. And on the right, not mentioned in the CB Insights list is GitLab.
We wrote this piece “GitLab stock and the generative AI opportunity”, in case you’re interested. Global Employment and payroll Market shakes out. So this idea being that there’s a number of firms out there that are making HR more efficient. That shouldn’t be very difficult to do. They predict that consolidation is approaching the workforce globalization space.
Couple names mentioned here. I would comment on Gusto, we actually use that ourselves. It’s rather slick for Payroll Solutions, I imagine they’re servicing the gamut of corporation sizes. ADP, that’s a stock that we actually hold. They used to be classified as Tech, now they’re classified as industrial. So that’s an incidental way to play this, I suppose.
Quantum Computing Trends of 2024
Quantum Computing advances hint at faster commercialization. I sure hope so. Quantum Computing has always been 5 years away. You see here Quantum Computing funding surged to a record high in 2023 and the excitement continues.
And what I thought was interesting here is they point to Atom Computing and neutral atoms. Now I’m not particularly familiar with that technology. But what I thought was fascinating here is when you see over a hundred companies shaping the quantum Computing landscape.
So there’s a lot of banter around the three Quantum Computing SPACs that debuted. That some people think IonQ is the next best thing since sliced bread. Well, first of all, it’s extremely overvalued. But perhaps they went public a little bit too early. And the odds that the companies that are going to lead are already public seems low when you have this many companies that remain private and also the work that’s being done by large firms.
These SPACs are spending all the cash that they raise so easily and they don’t really have much to spend on consolidating this space. I thought this was interesting. Here they talk about the intersection between Quantum Computing and AI heating up.
So does Quantum Computing utilize AI to do amazing things or does AI help Quantum Computing finally reach Quantum Supremacy? Well, people may be talking about that. Now we talked about that back in 2017. I think that article is still relevant and worth a read. We also published this recent piece Quantum Computing stocks meet AI hype.
So take a look at that. Cyber chaos drive security consolidation. To keep up with an evolving attack, surface cyber security leaders snap up competitors.
There’s a lot of M&A. We see that with Private Equity firms. Here you can see a large number of deals last year and cyber security leaders listed here though I don’t know that Cisco would be considered one of those.
But certainly, cyber security major players have been on an M&A tear. You see they list that Splunk acquisition. We were holding Splunk and, obviously, no longer holding it. SentinelOne has become in focus now with the CrowdStrike debacle.
So I wanted to point to CB Insight and this particular report 2024 Tech Trends.
And if you’re not familiar with CB Insights, their mandate is to scour this planet for the top private companies, what they refer to as startups. Now since they have all that data, they’re using AI to analyze it which makes sense. So they’d certainly have a good idea of what Tech Trends to watch this year.
Now if you’re a paying subscriber, you want to read this 129-page report, just drop us a note and we’ll put it right in your inbox. Here’s the CB Insight analyst, if you’re a CB Insight subscriber, soon you’ll be asking AI for answers.
I think only on their Elite level of subscription. But it seems like a great example of a use case for AI. Back to Trends. AI versus AI dog fights redefine data security. And I thought this was interesting because ChatGPT is leading to an explosion in email phishing attacks and adopting a zero-trust approach in your own life is a good idea.
AI and Fintech 2024
Warn your relatives not to trust anybody. Banks get AI FOMO. Many are viewing GenAI as an operational Silver Bullet. You could see here that they all think it’s going to be rather valuable.
However, there are significant challenges to realizing AI potential. I thought this was interesting. Data issues there at the top. And then of course, sufficient data sizes on the bottom and then in the middle, lack of budget and recruiting and retraining AI experts.
Well, if you want it bad enough, you’ll allocate budget for it. Blockchain’s uphill fin surf battle. Funding to blockchain startups is in the gutter. Looks like lots of solutions looking for problems.
They say here, early blockchain experiments in banking have hit roadblocks. So much for democratizing access to Financial Solutions.
Major blockchain trade Finance networks shut down as blockchain slips off the radar of Executives. They’re now pivoting to mentioning generative AI instead. Extreme weather is an opportunity for InsureTech.
The US saw a record number of billion dollar-weather disasters in 2023. You can see the legend on top there. Pause this and take a look. Rather fascinating.
The opportunity there is that a lot of large insurance companies are moving away from certain types of insurance coverage because there’s no predictability. So you can see here some early-stage deals to startups that are working on solving those problems.
AI and Healthcare in 2024
The great AI drug race heats up. Small molecule drugs have low molecular weights which means they can be administered orally.
Here you could see that the approval is moving towards those and AI is disrupting the small molecule drug development landscape. Some names mentioned here.
But look at all these startups working in AI for Pharma. And I highlighted Recursion there. They’re a publicly traded stock we have liked. We’ve written extensively about them.
Digital Therapeutics and wellness consolidates. These bullet points are taken from a piece we did on Pear Therapeutics.
Digital Therapeutics is the idea of using apps to help people do things such as combat addiction or anxiety or mental health problems. Well, investors are turning away from that. They say the industry was rocked by the bankruptcy of digital health trailblazer, Pear Therapeutics in 2023. We warned investors about that. It was a SPAC. Said here however we’re skeptical of the company’s value proposition.
There have only been a handful of clinical trials to date on Pear’s products and on digital therapeutics in general. Wrote that back in 2021. AI sales agents flood the e-commerce landscape.
This is rather interesting. So the cost of acquiring a customer for an e-commerce company has gone up significantly over the past decade and the idea here is that they now have NLP that allows for, that’s natural language processing technology, that lets AI Bots haggle and upsell. You see here a retail company talking about how a lot of them just did it for the fun and a number of firms here working on that.
Retailers tackle shrink with AI loss prevention. Loss prevention is a major problem for some retailers in the United States. I don’t know if technology can solve that.
Probably some stacked security guards at the entrance may be more effective. People just dining and dashing on whatever they like. You see the mentions go up, probably something to do with that. Here’s something rather interesting. I’ve come across this myself: in self-checkouts, if you don’t handle things properly they throw an alarm, and take a look at your merchandise and it identifies when merchandise is, at present, at the check stand but not scanned. That’s rather useful.
AI Software in 2024
AI sends a shock wave through gaming. Video games are five times bigger than the movie industry.
That’s fascinating. You can see here they expect that to continue growing and AI could cut Dev costs while making gameplay more immersive.
Two fascinating things here. Look at the outsourced labor to create a single in-game character, it goes down 94% with AI. And then look on the right, it says the average game time increased by 5% due to the interaction with AI. NPCs, non-player characters.
So they’re making gaming more engaging. Incumbents will lead the shift. So firms like Unity. We recently wrote about them.
They have a lot bigger problems than the AI tools that they’ve been developing. Humanoid robots come from manufacturing. This is an obvious one and you see here they say that Tesla and Boston Dynamics are in the lead. And anon of CB Insights had tweeted about investing in humanoids so we did this piece investing in humanoids. It’s not easy, it certainly isn’t.
Corporate Venture refocuses on strategic fit. Existing Corporate Venture investors are refocusing on strategic fit in sectors they know well.
I thought this was rather interesting. You see there how Microsoft is refocusing their own strategy along with Salesforce, Verizon, and Total. That’s, of course, because ye old macroeconomic headwinds are blowing.
Conclusion
So we’ve covered the 20 Technology Trends to watch I think in a pretty quick amount of time. If you’re a paying subscriber and any article we mention you’d like to read, please send us a note. And I’m going to leave you with this video on the most disruptive drug ever.
If I had to pick something that wasn’t in the CB Insights list that might- ought to have been there, then this would be it. Give that a watch. Thanks so much for taking the time to watch this today.
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