The future of artificial intelligence promises transformative advancements across various sectors as revolutionary technology augments human capabilities and drives innovation at levels not seen before. AI is already transforming the world of machines and diminishing the need for human interaction from healthcare to financial services, retail and industrial sectors.
Amid the advancements, the new US administration is rethinking the role the public sector should play in fueling and driving the future of artificial intelligence. Letting the private sector handle the development with minimal government interference and funding is emerging as Donald Trump’s administration policy, in stark contrast to Biden’s policies.
President Donald Trump has already hinted at eliminating the 2022 Chips and Science Act, which set $52 billion to help spur domestic semiconductor manufacturing and research. Instead, he has provided a framework and environment where companies invest billions of dollars to develop and run the AI infrastructure. That’s evident in the $500 billion Stargate project.
Additionally, Trump has surrounded himself with former and present venture capitalists who have advocated for less regulation of AI businesses, such as Vice President JD Vance and AI Czar David Sacks. The White House’s plan to lessen government funding and direction of AI development is a big risk that could endanger the US’s leadership in AI at a time when Trump has stated that outperforming China is a top priority.
“There is no private sector innovation without public sector research and development,” said Calendar Nelson, senior fellow at the Center for American Progress and former acting director of the White House Office of Science and Technology Policy. “Government-funded research creates the foundational knowledge that companies later build upon — from the internet and GPS to genomics and AI.”
Over the years, government spending on research and development has always acted as a key catalyst in driving innovation and growth. According to a Federal Reserve Bank of Dallas analysis, productivity increases dramatically when government research funding increases, producing long-lasting economic benefits that greatly exceed the initial investment.
On the other hand, China has adopted a very different tack from the US, which is debating the extent to which the public sector should finance advancements in AI innovation. Approximately 60% of all money entering China’s scientific and technology ecosystem comes from government-related sources, per a study published in late 2023 by the research firm Rhodium Group.
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11. Kingsoft Cloud Holdings Limited (NASDAQ:KC)
Number of Hedge Fund Holders: 12
Kingsoft Cloud Holdings Limited (NASDAQ:KC) is a software application company that offers integrated cloud-based services, including cloud computing, storage, and delivery. The company delivered better-than-expected results for the fourth quarter of 2024, with a 29.6% jump in revenue to $305.8 million. The increase came as the company recorded a 500% increase in AI cloud business gross billing.
Kingsoft Cloud Holdings Limited (NASDAQ:KC) posted its first-ever profit on adjusted operating profit, totaling $3.3 million, compared to an operating loss of $25.88 million a year ago. Revenue and earnings growth were driven by the increased contribution of the Xiaomi Kingsoft Ecosystem and AI-related customers. Additionally, Kingsoft Cloud’s offering recorded higher demand for its solutions as public cloud and enterprise cloud businesses harnessed the vast potential of AI cloud computing.
10. Tuya Inc. (NYSE:TUYA)
Number of Hedge Fund Holders: 13
Tuya Inc. (NYSE:TUYA), a leading global AI cloud platform provider, is transforming the smart home ecosystem by infusing technology with emotional intelligence, making it more than just functional.
On March 21, Tuya Inc. (NYSE:TUYA) announced a strategic partnership with DeepSeek to integrate its advanced AI model into Tuya’s AIoT platform, creating emotionally intelligent AI companions. This collaboration aims to transform devices like cleaning robots and smart photo frames into intuitive companions capable of understanding and responding to emotions using natural language processing, context modeling, and sentiment analysis. Proposed innovations include holographic projection companions, pet robots, emotional connection jewelry, and AI magic mirrors.
