Deal To Watch: Democratizing Artificial Intelligence

Key Stats:

Summary

GenesisAI has been selected as a “Deal to Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10%-20% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to hello@kingscrowd.com.

Problem

Artificial intelligence (AI) is undoubtedly one of the buzziest and most eagerly anticipated technological developments of the last ten years. While AI generates headlines by appealing to our futuristic ambitions (robots that can think like humans!), the field of artificial intelligence also promises to have significant impact on the very premise of human productivity. 

Accenture asserts that AI could double annual economic growth rates by 2035, and has the potential to boost labor productivity by up to 40 percent. A Stanford study demonstrated that the number of job openings requiring deep learning (which powers sophisticated artificial intelligence) increased by 35x between 2015 and 2017. University students are taking notice: introductory AI enrollment was up 3.4x in 2017 compared to 2012.

In line with growth in demand for AI professionals, the global artificial intelligence market is expected to grow to $390.9 billion by 2025. The market is expanding rapidly, at a projected CAGR of 46.2% between 2019 and 2025. 

However, despite tremendous growth and potential for ongoing innovation, artificial intelligence technologies are being developed in silos. Incumbent players like IBM, Intel, Google, and Microsoft are pouring massive sums into AI development that is fiercely protected, while smaller businesses struggle to implement AI without qualified developers. 

As talented developers work to push the boundaries of artificial intelligence, the industry is in need of a solution to distribute knowledge and innovation. An artificial intelligence landscape with fewer walls will allow the global economy to collectively realize the significant benefits of AI. 

Solution

GenesisAI is making AI advancements accessible to more businesses, speeding widespread adoption of AI to increase productivity. GenesisAI is a machine learning protocol and marketplace for AI products and services – the company describes itself as the “Amazon for AI.” Ultimately, the company’s vision is to achieve artificial general intelligence (an all-encompassing, human-like computer intelligence) via global AI collaboration. 

The founders of GenesisAI discovered (through their efforts building a previous AI startup) that AI developers are hard to come by, and AI innovation is owned by a small proportion of global businesses while the rest of the market struggles to keep up: the demand side of the marketplace. On the supply side, AI developers and the companies that employ them have a valuable asset in their AI models, but have no way to monetize them beyond the walls of their own business. 

The demand and supply side for AI models meet at GenesisAI, a platform to buy and sell AI technology. AI products sold on the marketplace conform to the GenesisAI protocol, building a standardized language for artificial intelligence development to speed sharing innovation across company borders. 

GenesisAI generates revenue by capturing 30% of each transaction within its marketplace. The company is currently pre-revenue, and is running a beta period with 25 demand-side buyers and 20 supply-side sellers. 

Team

GenesisAI is led by a talented team of Harvard graduates, top engineers, and leading scientists. CEO Archil Cheishvili graduated from Harvard College, spent a short time at Bridgewater Associates, and has launched a couple of previous startups (including a restaurant exit). 

Cheishvili is joined by fellow Harvard graduates David Fan (CTO) and Mena Gadalla (Chief Scientist). Fan is a Senior Software Engineer at Google (his work with GenesisAI appears to be part-time), and Mena Gadalla holds a Harvard PhD in Computational Science and Engineering). 

Growth Plan

GenesisAI reports that it is working diligently to achieve milestones on its product roadmap in an effort to generate revenue within Q1 or Q2 of 2020. A number of beta partners are projected to join the platform when it officially launches. Post-launch, the company’s priority will continue to be technological development. The majority of GenesisAI’s current capital raise will be devoted to IT infrastructure improvements to support platform scale, while remaining funds will be used for sales and marketing to generate buyers and sellers within the marketplace. 

Why We Like it

• Compelling logic of an AI marketplace: Artificial intelligence is a natural fit for a marketplace, namely because many companies are interested in implementing AI technology while a limited number of AI developers (and a limited number of companies that employ them) possess the capability to build models. Buyers will be willing to pay for artificial intelligence solutions for their business, while sellers are incentivized to monetize their creations. Ultimately, shared innovation will speed the development of truly intelligent machines, which is a compelling proposition for any business. 
• Strong team: Collectively the GenesisAI team boasts four Harvard degrees, experience at Bridgewater Associates, Google, Typeform, and other leading companies, and has already secured beta commitments ahead of the platform’s launch. While credentials aren’t everything, this team has secured strong computational science talent and a talented roster of investors and advisors to scale rapidly upon launch.
  

The Rating: Deal To Watch

GenesisAI is a compelling concept that makes abundant logical sense given the current dynamics of the artificial intelligence market. The company’s team is highly credentialed and seems capable of solving challenging issues in AI, including GenesisAI’s centralized machine learning protocol. 

However, GenesisAI is pre-revenue, which reduces our understanding of the company’s product-market fit and growth potential. Key staff members are part-time, which poses a risk for slowed product development; slowed product development in turn poses a risk for revenue generation. Potential investors should acknowledge these risks in considering an equity purchase. 

Assuming that GenesisAI is able to successfully launch a marketplace for AI products that resonates on both supply- and demand-side, attractive exit opportunities do exist. It wouldn’t be unreasonable for a tech giant like Google or Microsoft, who would potentially contribute a great deal of the AI products for sale on the GenesisAI marketplace, to acquire GenesisAI and take control of the marketplace (and the company’s machine learning protocol). GenesisAI could also grow toward an IPO. Overall, several AI companies have achieved $1 billion valuations upon exit, but most have been domain-specific (vehicles, healthcare, etc.); as the marketplace standardizing and connecting all AI products regardless of domain, GenesisAI could have even more potential. 

While potential investors should be wary of the increased risk inherent to a pre-revenue startup, GenesisAI’s compelling vision and strong team are signals of a successful company. This is a Deal to Watch.