Potential of start-ups focused on AI and other advanced technologies a bright spot for global investors
- HSBC’s three-day immersive innovation programme in California focuses on the transformative impact of dynamic firms on global business
- Despite a downturn in IPOs and challenging market conditions, the advanced technology sector continues to attract substantial interest
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HSBC immersive innovation programme sheds light on economic power of AI and deep tech
High interest rates, geopolitical and recessionary concerns in recent years have weighed on the number of private companies launching initial public offerings (IPO) – where they issue shares for sale to the public for the first time on financial markets – and weak exit market conditions have also slowed global venture funding.
However, according to the international policy forum Organisation for Economic Co-operation and Development, the global economy is proving resilient, with worldwide gross domestic product growth of 3.1 per cent projected for this year – maintaining last year’s pace – followed by a further pickup to 3.2 per cent next year. These predictions come as inflation continues to ease, and private sector confidence is improving.
The same optimism is reflected in a survey carried out in March and April by HSBC Global Research, which shows that nearly 80 per cent of global investors expect a pickup in venture capital (VC) and private equity activities over the next 12 months.
Last month global consulting firm EY reported that, for more than a decade, private markets have enjoyed a remarkable period of sustained growth, with only 2022 recording a slight drop. It said assets under management had risen from US$9.7 trillion in 2012 to an estimated $24.4 trillion by the end of 2023.
And despite the broader market headwinds, 70 per cent of investors in listed tech companies plan to maintain their tech sector weightings, while 16 per cent intend to increase their stakes, according to the HSBC survey.
Many VC experts remain optimistic that entrepreneurs with the right ideas and plans, especially in advanced technologies – including artificial intelligence (AI), where computer systems can copy intelligent human behaviour, industrial data, and robotics – offer enormous growth potential.
AI tops the agenda of many conversations, especially generative artificial intelligence (gen AI), which leverages machine learning to create new content and accomplish an increasing number of tasks.
