• How Google’s AI is unlocking the secrets of COVID-19
  • Why buy a robot? Subscribe to one…
  • The next smartphone you purchase might not be a phone at all

Dear Reader,

Wow… what a weekend.

Extraordinary times. The Federal Reserve announced that it is dropping its federal funds rate down to the range of 0%–0.25% and will buy $500 billion in U.S. Treasury securities and $200 billion in mortgage-backed securities.

We have returned right back to where we started back in 2016…

The Bank of Japan announced that it will be increasing its purchasing of Japanese stocks through exchange traded stock funds at the rate of more than $100 billion a year.

What does this all mean? Well, with interest rates at basically zero, there is no reason to buy Treasury bonds. The only place for returns will be in the equity markets. And with valuations as low as they are now, these depressed levels won’t last very long.

I know the market is down around 9% today as I write this, and these are uncomfortable moves. But keep in mind that this will present some great buying opportunities as well.

For now, let’s turn to today’s insights…

Artificial intelligence may find the cure for COVID-19…

It turns out Google’s DeepMind is applying artificial intelligence (AI) to COVID-19. And the team just released some fascinating research…

As a reminder, DeepMind is Google’s AI research division. It is most famous for designing the AI that beat the world’s best Go player. We talked about that early last year.

The work DeepMind has been doing on COVID-19 revolves around analyzing protein structures. I’ll explain with a little background.

Proteins are chains of amino acids. They are responsible for every function a living organism’s body performs. And the way a protein “folds” itself determines which bodily functions the protein impacts. In other words, a protein’s structure tells us how it will impact living organisms, including humans.

Protein folding is an incredibly complex subject. Understanding protein structures is one of the biggest challenges facing the world’s top biologists right now.

And that’s where AI comes in.

DeepMind used its AI to analyze and predict COVID-19’s protein structures. Then Google published this research for anyone to use. Now, this research hasn’t been scrutinized or tested yet – there hasn’t been enough time for the peer-review process. But Google pushed it out anyway because this is such a time sensitive issue.

If DeepMind’s AI is right with its analysis and predictions, it will help tremendously in finding a treatment and developing a vaccine for the virus. And here’s the thing – AI has made this possible.

I can’t wait to see if DeepMind’s predictions hold up. If they do, this could blow open the doors to an unlimited number of new therapies – including one for COVID-19.

A secretive AI startup just came out of stealth…

Vicarious is an early stage company that launched in 2010. The company attracted big-name backers like Jeff Bezos, Elon Musk, Mark Zuckerberg, Peter Thiel, and others – largely because of its mission. Vicarious had the ambitious goal to create a thinking, learning AI.

Thanks to its ambitions, Vicarious managed to raise more than $130 million since its founding in 2010. But here’s the thing – very few people know what the company has been up to. It’s kept everything a secret. Until now…

Vicarious just came out of stealth mode with its first product – an AI-powered robotic arm.

Here’s what it looks like:

Vicarious’ Robot Arm

Source: Wired

Now, robotic arms are not new. Plenty of factories today employ them to help with basic operations. But current robotic arms are limited to basic, repetitive tasks, and they require a lot of manual programming to function… That’s about to change…

Vicarious’ robotic arm can learn on the job without any human intervention. That means it will get better over time. And it will be able to adapt itself to new tasks when necessary. This is a huge breakthrough.

And in addition to launching its first product, Vicarious also announced a brand-new business model: robotics as a service (RaaS). Obviously, it is piggy backing on the massive success we’ve seen with the software as a service (SaaS) model.

Vicarious will offer its robots as part of a subscription package. There will be no up-front capital expenditures. Instead, there is a simple quarterly or annual subscription cost to use the robots.

What’s important about this is it removes the barrier to entry for smaller companies. Instead of investing millions up front, which smaller companies can’t afford, they can simply pay as they go.

And that means many small and midsize businesses will have access to the best automation technology on the market for the first time. There are massive implications here.

I believe this kind of technology will move us toward what I call decentralized manufacturing. It will empower companies to move their manufacturing back on shore, located closer to the markets they serve. That’s compared to the centralized model prevalent today, where so many of the world’s products are produced in massive factories in China.

We are already seeing a renaissance of sorts with a manufacturing rebirth in America. I believe the trend of decentralized manufacturing is quickly evolving due to what is happening today with trade negotiations and now the COVID-19 outbreak.

In fact, I believe this trend will contribute to a new “American golden age.” Even with the recent volatility, key technology stocks powering this trend will shoot higher. To see the three stocks to own during this new age of abundance, go right here.

A once-in-a-lifetime augmented reality opportunity…

Magic Leap is one of my favorite augmented reality (AR) companies. Readers may remember that I had the chance to test out the Magic Leap One headset over the holidays. Talk about an amazing experience. For those who missed it, I shared the details here.

Well, Magic Leap just announced that it is exploring “strategic alternatives.” That means it is shopping the company around to potential buyers. This raises the question – why would such a promising young company want to be acquired?

And the answer is that Magic Leap is going to need help with sales and distribution of its products.

The fact is, Magic Leap has spent the last eight years focused solely on its tech. This is a product development company, not a marketing and distribution company. It was focused on building the world’s best AR headset. And I believe it has succeeded with that.

Magic Leap One is available today. And I predict its next-generation product will be launching sometime in the fall of next year. That means the company has to start thinking about sales, marketing, fulfillment, and customer service. And it’s just not well-equipped to do that as a standalone entity.

That’s where a larger company could do wonders for Magic Leap. Instead of reinventing the wheel, Magic Leap could simply tap into existing sales and logistics channels. That would lead to much faster adoption than if Magic Leap had to go it alone.

So that begs the question – who might capitalize on this once-in-a-lifetime opportunity to buy one of the world’s best AR companies?

Well, with Magic Leap valued above $6.7 billion, it’s not going to be cheap. That means only larger, well-established tech companies will be able to pull it off.

Speculating, I would put Apple, Microsoft, and Sony at the top of the potential suitors list. Personally, I would love to see Apple be the one. Magic Leap’s design just fits with Apple’s brand.

And there are other potential suitors. AT&T, Google, Qualcomm, Alibaba, and NTT Docomo each have invested in Magic Leap, so they are certainly viable alternatives, as they have an inside view on the company’s progress and the financial wherewithal.

This will be fun to watch. I am incredibly excited about the work Magic Leap is doing. And I believe the AR market is worth more than $100 billion annually. That means it could move the needle for any of the companies mentioned above.

And, of course, that means we may have a fantastic investment opportunity in the near future. Stay tuned…


Jeff Brown
Editor, The Bleeding Edge

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