Thanks Doug for the write up, very insightful as always. The analysis on search is fascinating and would agree with you calling Google out in the category as of yet; nonetheless, if I were Google I would not be too comfortable as the pace of innovation is unprecedented which could disrupt search as we know it. Large investors, and possibly those with an activist mindset, should exercise pressure at the board to encourage faster innovation. Yes Google should go back to its founding roots and exercise their innovation muscle to reenergise the company.

I am a big fan of the effort you have taken leveraging GAI in the investment management industry and the comment around the Russell 2000 is another demonstration of how dated are index providers in the current market environment where AI will surely disrupt them. This I have very little doubt and those Start Portfolio Managers should also embrace this technology to become relevant in a future where they become a team in the same way that pilots are in the airline industry. In such scenario, will PMs command the same economics they enjoy today? Will investors in their strategies willing to pay what they pay for them today? Will there be the emergence of investment marketplaces where investors access the strategies they need and in the way they need them?

It is a fascinating time to be alive today, despite the social and economic challenges that we have brought to ourselves.

Thanks for sharing!

Expand full comment
Feb 19Liked by Doug Clinton

Doug, I have a "challenge question". How can we ascribe some valuation to Apple's Vision Pro and their upcoming AI announcements? Most in the media have abdicated. Bank of America has made an attempt and published their work.

I'm asking you because of your insightful posts on adoption curves, hype cycles, etc. As well, Nvidia, shows the benefit to investors of getting in at the earlier stages of adoption cycles.

Expand full comment
Feb 19Liked by Doug Clinton

Thanks Doug. As always, I learn so much from every post.

In this post, we see that monopolies don't remain dominant in the innovation economy. We may recall that IBM, Walmart, Microsoft, Apple, Intel, Amazon, and Alphabet, were feared for their dominance. Some are still feared. Innovation laggards like IBM, Intel, and Walmart have not recovered their ATHs.

Expand full comment

Thanks Doug and agree with you on the economics, and the promising potential that AI brings to the investment process. On this, I wanted to share a couple of startups that are deploying AI for making the research process more efficient.

One is called Sibli (https://sibli.ai/) and the other one FinChat (https://finchat.io/pricing/), both from Canada.

Sibli combines the use of natural language processing and generative AI models to process vast amounts of unstructured data, find relevant insights, and deliver them to institutional asset managers (fundamental and quant research based). They support institutional customers across a wide range of asset classes, including fixed income, real estate, private equity, and venture capital, among others. Sibli claims to be working with “top-tier” asset managers, including some of Canada’s eight largest pension funds, known as the “Maple 8”.

A $4.5m Seed round was closed last week and led by Staircase Ventures, a firm overseen by high-tech pioneer Janet Bannister (eBay, Kijiji). The deal included participation by The Group Ventures, Burst Capital, MaRS IAF, and private investors.

FinChat is a Pre-Seed stage compay merged with another investment research analytics platform startup, Stratosphere, launched in April 2023 to build an AI tool for researching publicly traded companies, and the platform quickly exploded in popularity surpassing 100,000 in a month whereas Stratosphere took two years to reach 50,000 active users.

FinChat has built a subscription-based public equity research platform and offers a self-serve product for “sophisticated, self-directed” retail investors and professional portfolio managers. They also sell an API-based solution for trading platforms and investment firms seeking to spin up an AI chat experience for their customers or employees on their existing platforms.

Many investment analysts spend most of their time in spreadsheets, emails, and slide decks searching for KPIs and revenue breakdowns for insight into whether to buy or sell shares in certain publicly traded companies. By aggregating this data and automating the retrieval and analysis process via an AI-powered solution, FinChat hopes to free these folks up to focus on other more important tasks.

On the back of this progress, Social Leverage (https://www.socialleverage.com/) - a US-based VC founded by seasoned group of entrepreneurs in the space - invested $1.5m last December and took a board seat, bringing the total investment to $1.75m.

Hope this is helpful.



Expand full comment