Artificial Intelligence (AI) is a huge subject and there is little doubt, it will drive incredible change over the coming decades in how we all live and work. We believe it will be akin to the Industrial Revolution where the world moved from hand production to the use of machines in the late 1700’s, driving incredible productivity advantages as a result.
At MM, we have not yet written a lot about AI as we grapple with how to approach this tectonic shift, although many companies we own are involved in this exciting, and slightly scary phenomenon. Snowflake (SNOW US) is one of those companies that will be central in the development of these technologies, and overnight they announced some important deals with Nvidia (NVDA US) and Microsoft (MSFT US), names that are sure to garner attention.
In simple terms, Snowflake is a cloud data company that manages huge data sets enabling query optimization and a bunch of other things in a secure way – data is the foundation of AI, however, data security is of critical importance. When using ChatGPT, the data that is put into the platform, becomes public. Samsung had this issue recently when their developers pasted lines of confidential code into ChatGPT to try to get the AI to fix a coding problem, but once put into ChatGPT, that data becomes the “property” of ChatGPT’s “brain.” They no longer use ChatGPT!
Amongst other things, Snowflake allows companies to use the power of AI without sharing their proprietary information with the world. This was the basis of the announcement overnight, where they announced a partnership with Nvidia to customize AI models for businesses that will keep proprietary data safe. They also announced a partnership with Microsoft (MSFT US) to bring generative AI to the company’s Data Cloud platform and link the company to OpenAI, again, engraining themselves in the AI ecosystem.
- While we are certainly not AI specialists, and the topic is simply a huge one to grapple with, the major parts of AI are data (Snowflake), advanced chips (Nvidia) & then the smarts to make great user experiences (Microsoft).
MM remains long and bullish SNOW US
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