AI is Eating the Private Markets

The data in our Q3’24 Power 20 report hits you over the head with a single story: the rise of AI.

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First, let’s look at the number of “pure-play” AI companies in the Power 20 (strictly defined as companies that are AI-native and solely focused on developing AI-centric products) in recent quarters:

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• Q1’24: 3 names in the Power 20 rankings were AI companies: OpenAI, Anthropic, and Scale AI 
• Q2’24: 4 names, adding Cerebras 
• Q3’24: 5 names, adding Groq and Cerebras

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The rankings are decided by a blended scoring methodology that includes price changes, price spreads, as well as platform bid-ask and trade activity. But also: revenue and revenue-growth estimates, which are more closely tethered to company fundamentals. 

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So we can’t just chalk it up to AI hype and revved up market sentiment. 

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Further, we also see an acceleration in AI company price growth and a larger weight in activity. Here are the numbers.

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Average price growth of AI companies in Power 20:

• Q2'24: +6.76%
• Q3'24: +12.7%

AI companies’ share of Power 20 activity: 

• Q2'24: 25.4%
• Q3'24: 31.9%

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Dwelling on price for a minute, the AI companies in the Power 20 averaged $30.2B in estimated market cap in the quarter (and value growth on par with share-price growth). 

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The growing weight of AI names also holds if we look at a much broader cohort: the most-active names on the Augment Platform. 

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In this cohort we include only companies that saw activity above a certain threshold in each quarter, so as to capture the 75 to 100 most-active names (and exclude the long-tail of companies with negligible activity). 

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Among most-active companies in the last three report datasets, AI companies accounted for this percent of activity:

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• Q1'24: 12%
• Q2'24: 22%
• Q3'24: 24%

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What’s more, the proportion of AI names making it to the ranks of the most active also increased QoQ: 

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• Q1'24: 11% of the most-active names were in AI
• Q2'24: 13.9%
• Q3'24: 15.6%

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The AI names included in the most-active cohort in Q3’24 include:

• The five Power 20 names in the quarter: (#3) Anthropic, (#4) OpenAI, (#15) ScaleAI, (#17) Cerebras, and (#20) Groq
• Up-and-coming names in Q3’24: e.g. SambaNova Systems, Glean, and Lambda 
• Several names with activity levels nearing those seen by Power 20 companies or “Up and Coming Companies”, but that still have not broken in: e.g. Coreweave and Cohere

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These statistics are even more notable given our narrow definition of what counts as “AI” in these rankings, including only pure-play AI.

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For detailed methodology and full risk disclosures, download our complete Power 20 Q3'24 report.

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*Inclusion in the Augment Power 20 does not predict future performance and should not be considered investment advice. Investing in private companies in the secondary market carries risks, including potential lack of liquidity and limited financial information. Chart is based on observed secondary market trading and activity volume. Past activity not indicative of future results. Includes only pure-play AI companies. For informational purposes only.