Title: Top Firms Holding the Most Generative AI Patents: Why It Matters for Investors
Behind the advancement of generative AI, numerous inventions and applications are emerging, many with attached patents. As per the World Intellectual Property Organization (WIPO), there are approximately 55,000 generative AI patent families currently in effect. In 2023 alone, over 14,000 such patents were published, representing a massive surge from the 733 patents registered in 2014. This exponential growth highlights the expanding use cases for generative AI and the growing business interest in the transformative technology.
For investors, understanding which companies have the most generative AI patents, what applications those patents cover, and which generative AI models they utilize can provide valuable insights into potential growth areas and stocks.
Tencent, a Chinese global tech giant, holds the most generative AI patents with 2,074, according to WIPO and EconSight/IFI analysis. The company's patent haul reflects its position as one of China's technological leaders, as well as its response to the government's tighter regulatory environment. Chinese companies make up the majority of the top patent holders, indicating an early advantage in the race to develop transformative products and services using generative AI. However, it's essential not to draw too many conclusions at this stage, as the full impact of these patent holdings remains to be seen.
IBM, Alphabet (Google), Microsoft, Meta Platforms (Facebook), and Adobe are among the leading American companies holding generative AI patents. IBM, with its deep history in AI, particularly with Watson, has a relatively deep patent portfolio suited for various industry verticals. Meanwhile, Google, Microsoft, and Adobe have integrated generative AI across their products, with Alphabet and Microsoft developing their own generative AI tools (Google Gemini and Microsoft CoPilot), and Adobe focusing on image creation and PDF analysis.
While the sheer number of patents might indicate a company's strength in generative AI, the quality of patents is equally important. Chinese companies have an advantage in quantity, but American AI leaders like IBM, Google, Microsoft, and Facebook lead in academic research. Overcoming the gap in computing power caused by U.S. export controls may be crucial in ensuring China remains competitive in LLM development.
Generative AI patents cover a wide range of applications, with software and general use cases being the most common. Life sciences, document management and publishing, business solutions, and industry and manufacturing are additional popular use cases for generative AI. Ping An Insurance Group, Tencent, and Baidu are significant patent holders in the banking and finance sector, as well as document management and publishing, while Alibaba and Microsoft focus on business solutions.
GAN, LLM, VAE, diffusion models, and autoregressive models are the primary generative AI models mentioned in patents, with GANs being the most commonly used. The type of data used in generative AI patents also differs across companies, with images and video being the most common, followed by other types of data, text, and speech and voice. Companies like Adobe are heavily dependent on images and video, while Siemens and certain entertainment companies utilize 3D image models. IBM shows a strong interest in molecules, genes, and proteins using generative AI.
In conclusion, generative AI patents are essential data points for investors, signaling both technological innovation and potential growth. Analyzing the generative AI patent landscape will help investors identify areas of opportunity and better understand a company's strength in this rapidly growing field.
Researchers in the finance sector are closely monitoring the generative AI patent landscape, as the quality and quantity of patents can indicate a company's potential for growth in this field. Additionally, understanding the types of generative AI models a company is utilizing, such as GANs or diffusion models, can provide valuable insights for investors seeking to capitalize on emerging opportunities in the market.
