Australia’s digital and technology sector got a major boost in last night’s Federal Budget, with the government announcing a total of $1.2 billion spending for the whole sector.

Part of that, or around 10 per cent, will be used to support the country’s emerging artificial intelligence (AI) industry.

In his speech, Treasurer Josh Frydenberg unveiled $117.8 million million in initiatives for the next four years to build Australia’s AI capability, as part of the nation’s Digital Economy Strategy.

The funding, as the Treasurer put it, will be used to “deliver Australia’s first AI action plan”.

But the most interesting part of the tech segment speech was the launching of what Frydenberg called the ‘patent box’.

The patent box is a tax incentive scheme designed to encourage the commercialisation of products that are invented and developed here.

Under the scheme, new patents that have been developed in Australia will be taxed at a concessional 17 per cent rate, almost half the rate that currently applies to large companies.

The incentive will first apply to the medical and biotech sector, but may eventually be expanded to the energy sector too.

That news may bode well for some AI-related stocks on the ASX that already have skin in the game.

Code Company Price % Year Market cap
BRN Brainchip Ltd 0.57 1063 $ 948,598,857.80
WBT Weebit Nano Ltd 1.78 388 $ 229,710,867.70
FGO Fargo Enterprises 0.005 233 $ 5,928,783.52
ALC Alcidion Group Ltd 0.375 150 $ 389,510,269.50
LNU Linius Tech Limited 0.024 100 $ 36,099,073.63
M7T Mach7 Tech Limited 1.04 84 $ 257,972,199.75
CM8 Crowd Media Limited 0.031 55 $ 18,872,084.45
MEB Medibio Limited 0.0075 10 $ 14,336,855.62
BTH Bigtincan Hldgs Ltd 0.805 6 $ 342,799,660.37
SP3 Specturltd 0.071 3 $ 7,547,674.88
GOO Gooroo Ventures Ltd 0.057 0 $ 8,475,678.56
PX1 Plexure Group 0.725 $ 125,745,471.03
VHT Volpara Health Tech 1.23 -6 $ 313,773,851.25
BID Bill Identity Ltd 0.58 -22 $ 97,633,614.00
LVT Livetiles Limited 0.175 -26 $ 155,072,198.68
LBT LBT Innovations 0.08 -30 $ 22,840,097.96
LBT LBT Innovations 0.115
WordPress Tables Plugin

AI-based medical stocks on the ASX

These are just two of AI-related medical/biotech stocks on the ASX with the potential to take advantage of the new initiative.

Mach7 Tech (ASX:M7T)

This company provides imaging solutions to the healthcare sector.

Its eUnity viewer gives clinicians the viewing experience they desire, while simultaneously reducing technical complexity.

Mach7 says its imaging infrastructure is ready to be connected to AI algorithms. To prove this, it has partnered with top AI platforms – from diagnostic and operational support, to predictive modelling and efficiency improvement platforms.

The company is yet to make revenue, and it share price has almost doubled in one year.

MediBio (ASX:MEB)

This health tech company combines mental wellbeing with AI.

It has recently been awarded a US patent for its method and system of assessing the mental state of patients.

MedioBio uses AI and deep learning algorithms to identify biological markers and patterns, to aid in early detection and screening of mental health conditions.

Its flagship software, Ilumen, is about to be launched in the UK.

Other AI-related stocks on the ASX

Globally renowned Appen (ASX:APN) is always one to watch for. The company collects and labels images, text, speech, audio and video and uses them to build and improve the world’s artificial intelligence systems used by some of the world’s largest tech companies.

Appen has done well financially too. Its FY20 revenue increased by 12 per cent to $600 million. And being a high growth company, the company surprisingly pays a dividend, which increased by 11 per cent to 10c per share in FY20.

There are also a bunch of AI-related small caps players that have done well including:

Brainchip (ASX:BRN)

Brainchip has claimed that it is the only publicly listed pure-play AI company.

The company focuses on the development of its Akida Neuromorphic Processor, which powers smart homes, transportations, cities, as well as the health sector.

In April, the company announced that it has begun volume manufacturing of its Akida AKD1000 neuromorphic processor chip for edge AI devices.

The company is yet to make a profit, but is well funded with $20 million in cash at the end of the last quarter.

Brainchip’s share price has risen by an astronomical 1,000 per cent in the past year.

Weebit Nano (ASX:WBT)

Weebit is the inventor of ReRAM, a faster and lower-power memory chip that was built to power wearables, Internet of Things (ioT) devices, and a host of AI applications.

The ReRAM cell functions similarly to a synapse in the brain, making it an ideal solution for neuromorphic computing, which drives AI.

During the last quarter, the company has come closer to its first commercial agreement, and is targeting one by mid-year.

The company is yet to make any revenue, but its share price has risen by almost 400 per cent over the past 12 months.

Linius Technologies (ASX:LNU)

Linius focuses on AI software and video technology,  and has recently released a “game-changing” AI-enabled tech platform, Whizzard, which makes countless hours of video calls searchable.

The technology will become applicable mainly to the legal sector, who has adopted the use of video conferencing and tools in the face of COVID-19.

Whizzard allows lawyers to sift through hours of videos within seconds, much like “Google, whereby key words or phrases are inserted in the search field”.

Linius’ share price has doubled in the last 12 months.

Hiremii (ASX:HMI)

The company, which made its debut on the ASX yesterday,  uses AI technology to remove the tedious tasks associated with the recruitment and vetting process, giving its clients time as well as cost savings.

It’s a fast growing company that has made $6 million from a standing start within three years.