AI's Long-Term Growth Story is Intact: Venture Capitalist
Jeff Herbst, a founding managing partner at GFT Ventures and former Nvidia executive, has expressed his views on the long-term trajectory of artificial intelligence (AI) and its influence on various industries. He believes that the shift towards accelerated or parallel computing, driven by extensive data for pattern recognition, is a significant transition that will unfold over the next decade or two.
According to Herbst, the conventional single-threaded computing infrastructure is gradually giving way to more advanced systems that can process data at a faster pace. This evolution has led to a notable increase in data center build-outs to support generative AI models like ChatGPT. However, he also pointed out that the rapid growth witnessed initially is now showing signs of slowing down. For example, Nvidia, a key player in the AI space, has experienced substantial earnings but cannot sustain its previous exponential growth rate.
The Outlook for Nvidia and the AI Industry
As a longstanding shareholder of Nvidia, Herbst believes that the company is currently trading at a reasonable valuation considering its future growth prospects. He suggests that investors with a long-term perspective, willing to endure gradual valuation increments, may find Nvidia an attractive investment option. In contrast, individuals seeking quick returns may not see the same appeal in the current market conditions.
The continuous expansion of data centers, driven by the increasing demand for AI applications and hardware, presents a lucrative opportunity for growth in the AI sector. Herbst underlines the significance of this trend as it fuels innovation and creates new avenues for companies operating in the AI space.
Exploring Future Investment Opportunities
Looking ahead, Herbst identifies early-stage companies that are at the forefront of AI applications as particularly promising investment opportunities. He references Nvidia CEO Jensen Huang's vision regarding the potential applications of AI in advertising technology, specifically in the realm of personalized advertisements tailored to individual consumers.
For instance, GFT Ventures has made investments in Cortex, a company specializing in contextualized advertising that aligns with real-time content, such as displaying relevant car ads during scenes featuring automobiles.
The emergence of Open AI's ChatGPT has played a pivotal role in advancing artificial intelligence capabilities, prompting discussions about its societal impact and implications for the future.
