Brainchip nears $1bn market cap on no revenues, but says market size will top $60bn
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While artificial intelligence (AI) microchip company, Brainchip (ASX:BRN) may not have the revenues to prove it yet, it says it has developed a revolutionary, AI-based computer chip that can process data like a human brain.
Excitement about its Akida AKD1000 AI microchips has pushed Brainchip’s market cap from below $200m just a year ago to near $1 billion at present.
Brainchip says it has solved the problems inherent in moving AI out of the data centre and to the location where data is created: the edge.
Edge applications are AI-based systems that reduce the volume of data and traffic from one place to another, with applications ranging from autonomous cars, home systems, and even smart cities.
The IP-protected Akida neuromorphic processors are advanced neural networking processors that bring artificial intelligence to the edge, in a way that existing technologies are not capable of, BRN says.
In today’s investors’ presentation, Brainchip’s focus was on the size of the addressable market for its Akida microchip technology, as it did during the AGM two weeks ago.
The company predicts the total number of IoT device connections worldwide will grow by 13 per cent to 41 billion connections by 2025, and will be worth $60 billion.
It says the number of applications that will require AI-based microchips by 2025 will include drones, automobiles, mobile phones, and industrial sectors.
BRN said today that it’s progressing well in the search of a new CEO, after its former CEO Louis DiNardo resigned in mysterious circumstances back in March.
Co-founder Peter Van der Made is currently sitting as interim CEO while the search is progressing.
At the last AGM held two weeks ago, Brainchip said it was issuing another 35 million shares to its US backer LDA Capital, for equity options that are now heavily in-the-money and gave LDA paper profits worth more than $30 million over the past year.
Back in May, Brainchip qualified to trade on the US OTCQX Best Market, after upgrading from the Pink Market.
The company said that upgrading to the OTCQX Best Market is an important step for companies seeking to provide transparent trading for their US investors.
Closer to home, Brainchip was recently included in the S&P/ASX 300 (AS52), after being added to the S&P/ASX All Technology Index last September.
Even as its share price surged by more than 400 per cent in the past twelve months, the company seems to be moving further away from delivering its maiden profit.
It reported an operating cash loss of $13 million million for FY20 based on revenue of just US$58k, following an $11.3 million loss incurred in FY19.
The company however said it’s currently working on commercial contracts, and began manufacturing its microchips on a mass scale back in April.