38 Billion Reasons to Buy This New Tech

Lou Basenese

Thursday, October 21, 2021

When it comes to investing in emerging technology trends, timing is everything.

Too early and there’s a lot of waiting (and losses) involved. Too late and there’s not enough upside remaining.

So how do we time our tech investments just right?

I shared one foolproof strategy with you before: use Gartner’s Hype Cycle.

Another way involves monitoring money flows from venture capitalists.

When they meaningfully ramp up their investing around a specific technology, we know development and deployment for that tech is about to accelerate rapidly.

And guess what? Right now, venture capitalists are going “all-in” on robotics and automation.

Here’s what’s going on — and of course, the best way to play the trend...

And 240 Billion More

In the last quarter, venture capital investments into artificial intelligence companies, the lifeblood of the robotics trend, hit a record $20 billion.

Year-to-date, a total of $38 billion has been deployed into over 1,200 deals.

That’s a serious flood of capital and you’d think that would turn some heads. But most investors remain oblivious to it, which means it’s not too late for us to get positioned.

To the contrary, I’d argue our timing is perfect, as we’re entering the knee of the growth curve.

More specifically, over the next three years, worldwide spending on robotics and drones is set to nearly double, from $128.7 billion to $241.1 billion.

So what’s driving the boom? We’ll get to that in a moment. But first, some crucial clarification…

Automation, Not Artificial Intelligence

For some, the mere mention of “robots” conjures up terrifying images of uber-intelligent machines blanketing Earth and wiping us out.

Even famed physicist Stephen Hawking and billionaire Elon Musk have made headlines with ominous predictions of destruction from robots.

Before his death, Hawking told the BBC, “The development of artificial intelligence could spell the end of the human race.”

Meanwhile, Musk famously likened artificial intelligence to “summoning the demon.” He says it’s “our biggest existential threat.”

Obviously, I want no part of investing in such technology.

So let me be clear: When I say “robots” or “robotics,” I’m not talking about artificial intelligence that threatens our very existence.

I’m talking about automation — i.e., machines that can complete tasks more efficiently, safely, and affordably than humans.

Candidly, automation is nothing new.

For the better part of a century, we’ve been inventing ways to automate dull, dirty, and dangerous work. But now, we’re entering a period of massive, exponentational automation.

So what’s behind the sudden change in the rate of innovation and automation?

Convergence at Work

The reason that automation is on the rise — and gaining traction and investment dollars more quickly than most people realize — can be summed up in one word: convergence.

Improvements on multiple technological fronts are converging to make robots dramatically more powerful and affordable than ever.

For example, thanks to advances in 3-D printing, prototypes can be made more quickly and cheaply, which accelerates development time.

Plus, the smartphone boom means sensors and other components used in robots are widely available.

Computing power also keeps increasing.

And thanks to advances in materials sciences, robots can be used in more demanding applications.

Simply put, robots are cheaper, smaller, more efficient, and capable of higher performance than ever. And that’s fueling a massive acceleration in investment, applications, and adoption.

All we have to do is figure out the best ways to capitalize on this trend.

I already shared the smartest, most diversified approach last month here.

But this time around, I’m focusing on a speculative opportunity that has more profit potential. So don’t miss out!

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Ahead of the tape,
Lou Basenese
Lou Basenese

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