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1993? AI-Super cycle?

What were you up to in 1993? That's when Jiang Zemin assumed the presidency of China, and my favorite band Navana dropped their third and final studio album, "In Utero." The year also witnessed the split of Czechoslovakia into the Czech Republic and Slovakia, and Singtel made its debut on the Singapore stock market. So it was some time ago yes!

In the tech world 1993 marked the birth of the web browser. The first public browser, Mosaic, later evolved into Netscape, changing our lives. I recall using it on my Sun Microsystems workstation, sensing its significance. Post-1993, the internet birthed colossal wealth through transformative companies. Here is a list of US based companies that thrived.

And in Asia-Pacific great wealth was also created:

I believe the release of ChatGPT version 3.5 in November 2022 signalled the beginning of the AI-super cycle. Many tech investors, myself included, believe the AI revolution changes many parameters for deploying capital. The question for investors: when and where to invest?

Firstly let's look at the time horizon. Analysing the pace of software innovation, we've experienced notable shifts from PC to the internet, mobile, and now AI and machine learning. The current speed of innovation, especially with AI, is unprecedented. From 1993 to now, just over 30 years, these internet companies are still growing. And many took some time to launch. For example Google launched in 1998. This time I believe things are different. I think the next 15 years we'll see the emergence of the great AI businesses.

In the AI cycle, as in 1993 with the internet, identifying winners is uncertain. Like with other super cycles in commodities for example, I believe investing in "picks and shovels" becomes crucial, mirroring the past uncertainty in the early days of the internet around core technologies such as web browsers and search engines.

Three key "picks and shovels" in AI are on offer for investors. Firstly, large language models (LLMs), dominated by giants like OpenAI. However, entry barriers and capital requirements limit opportunities for small investors. Secondly, AI infrastructure, including data centres, offers stable returns but with less explosive growth potential. The third is the worker bees. The APIs.

Our focus at Func Ventures focus is API centric applications, platforms and tools and for five compelling reasons. Last months I talked about the API super powers. Read the full article here.

Consider super power number 4. Enablers for AI, IoT, and DOA. Enablers Perform Actions. The adoption of transformative technologies such as Artificial Intelligence (AI), Internet of Things (IoT), and Decentralised Autonomous Organisations (DOAs) relies heavily on APIs. APIs are the action bots that perform tasks in the real word for such transformative technologies. Leverage AI code generators and chat bots to take away natural language and interface tasks is possible, but when it come to solving the difficult problems, sending messages, making a transaction or turning on a switch, its APIs to the rescue.

API companies will be plentiful and geographically diverse offering many opportunities in APAC. A focus on investing in APIs and related technologies is our focus.


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