In this article we discuss the 10 AI news investors probably missed.
A December 30 report by CNBC discussed the rapid adoption of generative AI by businesses, its potential to significantly impact global GDP, and the varying perspectives of leaders on its future. As per the report, generative AI has evolved from a novelty to a key tool for businesses, with nearly two-thirds of organizations using it for tasks like customer service automation and data analysis. While its growth could potentially boost global GDP by $7 trillion in the next decade, opinions among business leaders vary. Jamie Dimon and Bill Gates view AI as transformative, comparing it to past technological breakthroughs.
However, Sundar Pichai and Satya Nadella caution that further advancements will be slower, requiring deep innovation. Meanwhile, concerns about AI’s ethical risks, highlighted by Warren Buffett and Mark Cuban, suggest the technology could have unintended consequences, despite its growing importance in industries like defense.
READ ALSO: 9 Important AI News and Ratings on Investors’ Radar and 10 AI News Investors Shouldn’t Miss.
Open-Source AI from China Takes on Major U.S. Models with Fractional Costs
CNBC’s TechCheck anchor, Deirdre Bosa reported on December 30 that DeepSeek, an open-source AI model developed by a Chinese research lab, has emerged as a serious competitor to leading models like GPT-4 and LLaMA 3.1. Despite using lower-cost H800 chips, which are less powerful versions of the H100, DeepSeek outperformed these models in key benchmarks and was built for just $5.5 million, a fraction of the cost of other frontier models that require hundreds of millions or even billions to develop.
This signals a shift toward more commoditized AI models, where progress relies less on building new infrastructure and more on optimizing existing models. The development raises concerns for investors in major U.S. tech companies, as it challenges the long-standing dominance of firms like OpenAI. Additionally, the success of DeepSeek highlights the potential advantage of open-source models, suggesting that nations like China, without access to the latest chips or massive investments, could still compete effectively in the AI race, Bosa mentioned. The implications of this development, particularly for the U.S.-led AI dominance and global geopolitical dynamics are expected to unfold further in 2025.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 AI News Investors Probably Missed
10. ZenaTech, Inc. (NASDAQ:ZENA)
Number of Hedge Fund Holders: N/A
ZenaTech, Inc. (NASDAQ:ZENA) focuses on AI-powered drones, quantum computing, and enterprise SaaS solutions tailored for critical business operations.
The company announced that it will attend two investor conferences in January 2025. The management team will provide updates on its AI drone technology, U.S. defense projects, and business strategies, including Quantum Computing and DaaS initiatives. ZenaTech will participate in the CEM AlphaNorth Capital Event in the Bahamas from January 17-19 and the Microcap Conference in Atlantic City, New Jersey, from January 28-30, engaging in presentations and one-on-one meetings with investors.
9. Safe Pro Group Inc. (NASDAQ:SPAI)
Number of Hedge Fund Holders: N/A
Safe Pro Group Inc. (NASDAQ:SPAI) produces personal protective equipment and ballistic protection products, in addition to offering drone-based inspection services for infrastructure. The company utilizes AI for data analysis and reporting, delivering solutions for public safety, emergency management, and the inspection of critical infrastructure.
On December 30, Safe Pro (NASDAQ:SPAI) announced receiving a $5 million request from Ukraine’s State Special Transport Service (SSTS) for up to 50 AI-powered Drone Demining packages to aid demining and land survey operations. These packages, featuring the SpotlightAI detection platform, include drones, mapping tools, and protective equipment, improving efficiency and safety in addressing Ukraine’s landmine crisis. Over 139,300 km² in Ukraine is contaminated, causing significant economic losses. SpotlightAI processes drone images in under 0.2 seconds, detecting over 16,540 explosive remnants across 4,219 hectares, offering a scalable solution compared to slower traditional methods.
8. Palladyne AI Corp. (NASDAQ:PDYN)
Number of Hedge Fund Holders: N/A
Palladyne AI Corp. (NASDAQ:PDYN) develops artificial intelligence software aimed at improving autonomy in robotic systems.
Palladyne AI Corp. (NASDAQ:PDYN) announced a significant milestone for its Palladyne Pilot AI platform with the first autonomous flight of a third-party drone. The AI successfully identified, prioritized, and tracked terrestrial targets, integrating with the drone’s autopilot to autonomously follow the target. CTO Dr. Denis Garagic highlighted the platform’s potential to bring advanced intelligence capabilities to smaller, cost-effective drones, with commercialization expected by Q1 2025. Dr. Denis Garagic, co-founder and CTO, Palladyne AI said:
“Once we complete commercialization of Palladyne Pilot — which we expect to happen by the end of the first quarter of 2025 — small, economical drones will finally offer some of the same intelligence capabilities that larger, multi-million-dollar unmanned systems have had for years.”
7. Knightscope, Inc. (NASDAQ:KSCP)
Number of Hedge Fund Holders: N/A
Knightscope, Inc. (NASDAQ:KSCP) is a leader in developing robotics and artificial intelligence (AI) technologies for public safety applications.
On December 30, Knightscope announced that seven clients renewed contracts for its Autonomous Security Robot and Emergency Communication Device services, including commercial real estate companies, a casino, a hospital, a school, and local governments. Additionally, five clients upgraded to the fifth-generation K5 Autonomous Security Robot (K5v5), which uses AI-powered technology to advance safety in various environments. The redesigned K5v5 features faster production, improved quality, and easier maintenance. Knightscope’s integration of its Risk & Threat Exposure platform further strengthens its public safety offerings, improving performance and client satisfaction.
6. Rezolve AI Limited (NASDAQ:RZLV)
Number of Hedge Fund Holders: 3
Rezolve AI Limited (NASDAQ:RZLV) specializes in e-commerce AI, offering a mobile-based platform that facilitates immediate transactions such as purchases, bill payments, and donations.
Rezolve announced the conversion of approximately $59 million in variable rate convertible loans into shares by the end of 2024, including $10 million with Yorkville Advisors. This move removes these liabilities from its balance sheet, highlighting investor confidence and providing financial flexibility. CEO Daniel M. Wagner stated the company enters 2025 with cash reserves and a strong balance sheet, focusing on scaling its AI-driven retail solutions, including Brain Commerce and Brain Checkout. He said:
“We enter 2025 with a robust balance sheet, cash reserves, and the agility to manage remaining obligations efficiently. This solid foundation allows us to focus on scaling our innovative AI-powered solutions.”
5. Bit Digital, Inc. (NASDAQ:BTBT)
Number of Hedge Fund Holders: 6
Bit Digital, Inc. (NASDAQ:BTBT) provides specialized cloud-infrastructure services tailored for artificial intelligence applications, in addition to its main business of digital asset staking and mining.
On December 30, Bit Digital, Inc. (NASDAQ:BTBT) announced that it acquired a property in Montreal, Canada, for CAD $33.5 million to develop a 5MW Tier-3 data center, set to be operational by May 2025. The site, a former encapsulation manufacturing facility, will be retrofitted with advanced cooling systems, including direct-to-chip liquid cooling, to support AI workloads and renewable hydroelectric power from Hydro-Quebec. The project aligns with Bit Digital’s plan to expand its HPC data center capacity to 32MW by 2025, with further scalability possible. CEO Sam Tabar highlighted cost efficiencies and non-dilutive financing as key advantages.
4. Stagwell Inc. (NASDAQ:STGW)
Number of Hedge Fund Holders: 15
Stagwell Inc. (NASDAQ:STGW) provides AI-powered communications, research, and media technology, along with AI-driven solutions for digital platforms, targeting, e-commerce, and consumer engagement. The company also develops software for advanced media and data strategies.
On December 30, Stagwell (NASDAQ:STGW) announced plans to acquire Create. Group, a top digital communications firm in the Middle East, as part of its Code and Theory Network. Create. Group, with 15 years of experience in digital strategies and innovation, serves notable clients like DCT Abu Dhabi, Dubai DET, and NEOM. Recognized for its excellence through multiple awards, the company will strengthen Stagwell’s focus on AI, emerging technologies, and consumer behavior. This acquisition, Stagwell’s eleventh in 2024, supports its global expansion and digital transformation goals, integrating Create. Group into a network of over 2,000 professionals worldwide.
3. NICE Ltd. (NASDAQ:NICE)
Number of Hedge Fund Holders: 24
NICE Ltd. (NASDAQ: NICE) provides cloud-based AI platforms designed to improve customer engagement, automate workflows, and strengthen decision-making processes.
On December 19, Jefferies downgraded NICE (NASDAQ:NICE) from Buy to Hold, citing factors such as a CEO transition, slower-than-expected cloud growth for 2025, and heightened competition. The firm reduced its price target to $200 from $215. Incoming CEO Scott Russell, formerly of SAP, has received positive feedback, but Jefferies sees potential risks from the departure of long-time CEO Barak Eilam. Analyst Samad Samana forecasted 2025 cloud revenue growth at 15%, below the 16.6% consensus, and noted increasing competition in the CCaaS market from incumbents, large software vendors, and hyperscalers introducing GenAI tools.
2. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) is known for its semiconductor solutions, providing processors and GPUs for data centers, gaming, and embedded systems. The company emphasizes delivering high-performance computing products designed for AI-driven applications.
Northland Capital rated AMD as Outperform with a price target of $175, highlighting more upside than risks for 2025. AMD is projected to gain market share in AI GPUs, server CPUs, and PCs as challenges in embedded and gaming segments ease. AI revenue is estimated to grow from $5.2 billion in 2024 to $9.5 billion in 2025, with the MI325X competing well against Nvidia. In server CPUs, AMD’s Turin chips are expected to outperform Intel’s Granite Rapids, with non-AI data center revenue projected at $8.5 billion in 2025. In PCs, AMD may benefit from increased demand as Windows 10 support ends, potentially driving client revenue beyond $9 billion. The firm said:
“AMD remains one of our top picks for calendar year 2025. We anticipate AMD will continue gaining market share in AI GPUs, server CPUs, and PC clients as the headwinds from embedded and gaming segments subside. AMD’s AI strategy is driven by its roadmap and Total Cost of Ownership (TCO) advantages, while its server and client CPU products outperform competitors. The PC refresh cycle could be stronger than current expectations, presenting significant upside to calendar year 2025 estimates.”
Embedded revenue is recovering, with a projected $4 billion in 2025, while gaming revenue is expected to stabilize after a significant decline in 2024. Overall, AMD’s roadmap and competitive positioning suggest strong growth potential. “We believe AMD’s roadmap, strong competitive positioning, and market dynamics present significantly more upside to CY25 than risks,” the firm added.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) focuses on AI-powered solutions, providing platforms for data centers, autonomous driving, robotics, and cloud computing.
Nvidia has finalized its $700 million acquisition of Israeli AI firm Run:ai after receiving unconditional approval from the European Commission earlier this month, Reuters reported. The deal, announced in April, underwent antitrust scrutiny over concerns about competition in the AI and GPU markets. While Nvidia holds about 80% of the AI GPU market, regulators found no significant competitive risks. Run:ai, which plans to make its software open-source to expand across the AI ecosystem, remains under review by the U.S. Department of Justice for antitrust considerations.
While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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