In this article, we discuss the 10 AI news that you should not miss.
Generative AI Set to Capture 10% of Total IT Market by 2032
Bloomberg Intelligence projects that the generative AI market will grow at a compound annual growth rate (CAGR) of 42%, reaching $1.3 trillion by 2032, up from $40 billion in 2022. This growth is driven by demand for generative AI products, especially infrastructure for training large language models, digital ads, and specialized software. The market could generate an additional $280 billion in software revenue, with major companies like Amazon, Microsoft, Google, and Nvidia expected to benefit as enterprises increasingly move workloads to the cloud.
By 2032, generative AI is predicted to account for 10% of total IT spending, with significant revenue coming from infrastructure services, AI servers, and software. The technology is also expected to have a transformative impact on life sciences and education. However, the rapid growth of generative AI could disrupt several industries, including semiconductors, hardware, IT services, and advertising.
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Navigating the Evolving Landscape of Generative AI
In a blog post, Carrie Tharp, Vice President, of Strategic Industries, wrote that Generative AI has evolved from a futuristic concept into a vital business strategy, transforming industries by enhancing efficiency and customer engagement. Despite its growth, many organizations are still testing its applications, with a study revealing that a third of businesses are evaluating its use. Key trends include the rise of multimodal AI, AI agents, AI-powered search, customer experiences, and deepfake defense.
In retail, AI is being used for customer service, marketing, and digital commerce, with long-term goals of creating personalized experiences and AI-powered assistants. The financial services industry is leveraging AI for fraud detection, risk management, and efficiency, while healthcare uses AI to reduce administrative burdens and improve patient care. The media and entertainment industry is increasingly adopting AI to improve productivity, content personalization, and operational efficiency.
As AI becomes more sophisticated, businesses need to address challenges like deepfake defense while focusing on high-value use cases. Generative AI is no longer a novelty but a transformative tool, with businesses needing to prioritize AI strategies that align with their specific industry needs and long-term goals.
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 That You Should Not Miss
10. Pony AI Inc. (NASDAQ:PONY)
Number of Hedge Fund Holders: N/A
Pony AI Inc. (NASDAQ:PONY) specializes in autonomous mobility, offering AI-driven robotruck and robotaxi services, intelligent driving software, and vehicle integration solutions in China and the U.S.
Pony.ai (NASDAQ:PONY) has been granted approval for cross-regional autonomous driving operations in China’s Greater Bay Area, under a new framework that allows companies with pilot qualifications to expand across recognized regions. Its vehicles will now operate seamlessly across key transit hubs, including airports and high-speed rail stations. As the first company in China to secure unmanned driving service licenses in cities like Beijing, Shanghai, Guangzhou, and Shenzhen, Pony.ai has established nearly 3,000 service points. Additionally, its autonomous trucks will handle cross-city freight, marking a significant step in integrating AI-driven solutions into both passenger and commercial transport.
9. Mercurity Fintech Holding Inc. (NASDAQ:MFH)
Number of Hedge Fund Holders: N/A
Mercurity Fintech Holding Inc. (NASDAQ:MFH) is a financial technology firm that provides business consulting, cryptocurrency mining, and cloud storage solutions. The company’s newest joint venture in Hong Kong is set to concentrate on artificial intelligence hardware.
Mercurity (NASDAQ:MFH) closed a private investment in public equity financing on December 23, 2024, raising approximately $10 million by selling 1,470,000 shares at $6.81 per share. The funds will support the company’s strategic initiatives, especially in AI hardware manufacturing and advanced liquid cooling technologies, aimed at strengthening AI-driven infrastructure. This move aligns with MFH’s broader vision to innovate within fintech and technology services. CEO Shi Qiu expressed confidence that this investment would bolster operations and help the company meet the growing demands of AI-powered industries.
8. Gaxos.ai Inc. (NASDAQ:GXAI)
Number of Hedge Fund Holders: 1
Gaxos.ai Inc. (NASDAQ:GXAI) develops AI applications for sectors like wellbeing, coaching, and gaming, and offers a platform that integrates conventional games with unconventional game mechanics.
Gaxos.ai (NASDAQ:GXAI) has integrated Meshy 4 into its Gaxos Labs platform, leveraging AI-driven generative geometry to improve 3D modeling for game developers. The update enhances 3D modeling workflows by allowing users to switch between quad- and triangle-based meshes, limit polycounts, and produce higher-quality models efficiently. Key features include dynamic mesh topology, polycount management, improved geometry quality, and accelerated workflows, enabling smoother asset creation and real-time engine integration. CEO Vadim Mats highlighted the update’s role in helping users create professional-quality 3D assets faster.
7. Bridgeline Digital, Inc. (NASDAQ:BLIN)
Number of Hedge Fund Holders: 3
Bridgeline Digital, Inc. (NASDAQ:BLIN) offers AI-driven marketing technology solutions, including site search, natural language processing, SEO audits, and digital experience management, serving sectors such as eCommerce, healthcare, and finance.
Bridgeline (NASDAQ:BLIN) reported its fiscal fourth-quarter and full-year 2024 financial results, highlighting growth in its HawkSearch platform. Quarterly revenue reached $3.9 million, slightly up from $3.8 million the previous year, with a gross profit of $2.7 million. Annual revenue totaled $15.4 million, down from $15.9 million, while gross profit remained steady at $10.4 million. The company signed 83 license deals in 2024, generating $2.1 million in annual recurring revenue.
HawkSearch introduced features like Conversational Search and Smart Facets, leveraging AI to improve product discovery. Partnerships with Optimizely, Moblico, and Human Element expanded HawkSearch’s reach, while customer wins included major distributors and retailers upgrading their search capabilities with AI-driven tools. Bridgeline’s CEO emphasized its strong sales pipeline and innovative AI offerings for 2025. He said:
“We begin 2025 with the largest sales pipeline in the company’s history, an AI product suite that both existing customer and new customers need, and an outstanding industry reputation from customers and analysts.”
6. Xometry, Inc. (NASDAQ:XMTR)
Number of Hedge Fund Holders: 7
Xometry, Inc.’s (NASDAQ:XMTR) AI-driven marketplace and Instant Quoting Engine streamline manufacturing by analyzing complex parts in real time, connecting buyers with global suppliers, and providing precise pricing and lead times.
Wedbush initiated coverage of Xometry (NASDAQ:XMTR) with an Outperform rating and a price target of $48. The firm noted that Xometry is the leading digital marketplace for custom manufacturing, operating in a large, fragmented industry that has been slow to shift online, as per The Fly. Wedbush emphasized the company’s growing network of buyers and suppliers, along with its advanced artificial intelligence-driven pricing and matching algorithms, which position Xometry to capture significant market share. The firm expects the company to experience a multi-year period of strong growth, driven by its innovative technology and expanding customer base.
5. iLearningEngines, Inc. (NASDAQ:AILE)
Number of Hedge Fund Holders: 10
iLearningEngines, Inc. (NASDAQ:AILE) provides an AI-powered platform designed to deliver personalized learning experiences.
iLearningEngines (NASDAQ:AILE) voluntarily filed for Chapter 11 bankruptcy on December 20, 2024, in the U.S. Bankruptcy Court for the District of Delaware. The company plans to maintain regular operations during its Chapter 11 proceedings and continue supporting its customers who rely on its Applied AI platform. Interim CEO Tom Olivier expressed confidence that this process will position the company for a stronger future, focusing on long-term growth. As part of the bankruptcy process, iLearningEngines will seek Court approval to maintain normal operations, including employee compensation and vendor payments.
4. Li Auto Inc. (NASDAQ:LI)
Number of Hedge Fund Holders: 26
Li Auto Inc. (NASDAQ:LI) specializes in designing, manufacturing, and selling premium smart electric vehicles, including MPVs and SUVs. Moreover, the company has spent a significant portion of its R&D budget on AI development.
South China Morning Post reported that Li Auto (NASDAQ:LI) plans to transition into an AI-focused company, with ambitions to develop humanoid robots and make AI central to its future strategy, according to CEO Li Xiang. The company aims to position its foundational AI model, Mind GPT, as one of China’s top three within a few years and will launch an AI assistant app, Lixiang Tongxue, soon. Despite not ranking in current AI model evaluations, Li Auto has invested over half of its 10 billion yuan R&D budget this year in AI development.
3. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 74
QUALCOMM Incorporated (NASDAQ:QCOM) specializes in creating technologies for wireless communication, with investments in AI, 5G, and IoT applications across multiple sectors.
Qualcomm (NASDAQ:QCOM) recently announced that it has introduced the Qualcomm AI Program for Innovators (QAIPI) 2025 in the Asia-Pacific region, targeting developers and startups in Japan, Singapore, and South Korea. The program offers resources, mentorship, and training to create on-device AI solutions in sectors like mobile, IoT, and compute. Participants can utilize the Qualcomm AI Hub for model optimization and deployment.
Applications close on April 15, 2025. Selected startups will enter a second phase from May to October, receiving hardware, a stipend, and patent filing support, with their projects showcased at a Demo Day in late 2025. Qualcomm executives emphasized the program’s role in advancing scalable and efficient AI technologies.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) incorporates AI across its cloud services, productivity tools, and business solutions to improve automation, security, and overall user experience. Its AI initiatives span advanced cloud offerings, AI-driven business software, and innovative language processing and computing technologies.
According to The Information, OpenAI and Microsoft (NASDAQ:MSFT) have been in discussions regarding changes to OpenAI’s structure as it plans to transition from a nonprofit to a for-profit entity since October. The talks focus on Microsoft’s potential equity stake, its role as OpenAI’s exclusive cloud provider, the duration of Microsoft’s rights to use OpenAI’s intellectual property, and whether it will continue to receive 20% of OpenAI’s revenue. These discussions highlight tensions over cloud services and governance as OpenAI plans to shift to a for-profit model under CEO Sam Altman.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) is leading advancements in artificial intelligence, utilizing the technology to transform the way we shop, enjoy entertainment, and manage operations.
Business Insider reported that AWS is reducing spending on ZT Systems, a supplier of server and networking equipment, as it increasingly designs its own data center components to cut costs and raise efficiency. AWS spent nearly $2 billion on ZT Systems in 2022, but internal documents and employee statements suggest a shift toward custom hardware, potentially impacting this partnership. Despite the reduction, AWS maintains its business relationship with ZT Systems and plans significant capital investments in data centers for 2025. This move aligns with a broader trend among tech companies like Google and Nvidia to develop in-house hardware for better control and cost savings.
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) 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 AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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