ARK Funds released its Big Ideas of 2022 and its analysts see the highly disruptive technologies of Deep Tech to grow from about $2o million to hundreds of millions.
The company identifies five key technological platforms — AI, Batteries, Block Chain, Robotics and Gene Sequencing — as being the primary drivers of this growth.
AI — $100 Trillion
The AI sector is set to increase nearly 10-times, according to the report. The ARK analysts suggest that by 2030, placing the equity market cap for AI in the $100 trillion range.
Battery Technology — $30 Trillion
The report sees broad adoption of technologies, such as electronic vehicles. If so, a Deep Tech play would be to invest in battery companies. The analysts expect that the battery market cap would reach $30 trillion by the next decade
Robotics — $10 Trillion
Robotics is more than just the bots we’re used to seeing in science fiction movies. In fact, that’s only a small part of the market. ARK analysts include sectors, such as 3D printing and reusable rockets — alongside robotics — in their estimates for the robotics field. If so, advances in robotics could lead to $10 Trillion in equity capitalization by 2030, they write.
Genomic Tech — $3 Trillion
ARK analysts refer to genomic tech as living therapies, which are “genetic tools that create new forms of therapeutic intervention could emerge, enabling precise, efficacious, and durable treatments against pernicious and chronic diseases,” according to the report. These technologies include gene sequencing, living therapies and gene editing. They also forecast deep drops in the cost of gene sequencing. All of this suggests a $3 trillion equity market cap by 2030.
Block Chain — $50 Trillion
ARK also expects Block Chain tech, such as cryptoassets and digital wallets, to explode by 2030, realizing a $50 trillion equity market cap by 2030.
“We believe that historians will look back on this era as one of unprecedented technological foment—and they will say: everything changed.”
Deep Tech Emergence and Convergence
While we tend to look at these as emerging technologies, ARK sees converging technologies as a major trend.
The report states: “ARK’s research is centered around the belief that five innovation platforms are evolving and converging at the same time: Artificial Intelligence, Robotics, Energy Storage, DNA Sequencing, and Blockchain Technology. We identified 14 transformative technologies that are approaching tipping points as costs drop, unleashing demand across sectors and geographies and spawning more innovation. We believe that historians will look back on this era as one of unprecedented technological foment—and they will say: everything changed.”
ARK’s report outlines three expamples of historic emergence/convergence:
- The convergence of robotics, battery technologies, and artificial intelligence is likely to collapse the cost structure of transportation, impacting the economics of auto, rail, and airline activities
- The convergence of next generation DNA sequencing, artificial intelligence, and gene therapies should boost returns on investment significantly, potentially creating a golden age of health care likely to rival that of the eighties and nineties.
- The convergence of application programming interfaces (APIs), social platforms, and blockchain technology could integrate business and consumer marketplaces, disintermediating the middlemen dominating financial ecosystems.
ARK’s guidance is largely informed by a principal called Wright’s law.
They explain that Wright’s Law, formulated by Theodore Wright in 1936, offers a framework for forecasting cost declines as a function of cumulative production. Specifically, the law predicts that for every cumulative doubling of units produced, costs will fall by a constant percentage.