In the face of growing enthusiasm for all things AI, Nick Clegg, head of global affairs for Meta Platforms Inc., held a virtual roundtable within the metaverse in March to outline what Meta sees as the future of virtual worlds.
Clegg highlighted two main ways Meta can leverage its investment in virtual worlds, namely advertising and commerce. Meta has found success in utilizing user data to target tailored advertisements on platforms such as Facebook and Instagram, driving significant profitability. The plan is to follow a similar strategy with the metaverse. However, it remains to be seen how willing consumers are to buy virtual goods or use the metaverse for real-world shopping.
While certain communities, such as gaming and fitness, have been quick to embrace virtual worlds, Meta sees untapped potential in other fields like education and healthcare, according to Clegg. He emphasized Meta’s commitment to involving researchers, civil organizations, and other companies in the development of the metaverse, with the goal of creating an experience that fosters genuine creativity, ingenuity, and enjoyment.1
Also in March, at Nvidia GTC (a conference focused around issues in AI and the metaverse), included an expert panel discussing “The industrial metaverse: Are we there yet?” The conclusion of the participants was that the industrial metaverse—which offers real-time, collaborative, and photorealistic industrial visualization—has the potential to revolutionize how we build our factories, cities, and bridges. It can inform and develop real-world engineering and simulation, making infrastructure greener, more sustainable, and more resilient.
The panelists saw collaboration and interoperability as key aspects of the industrial metaverse’s potential, allowing for multi-user interactions and company-to-company collaboration. As demands grow for infrastructure to meet economic, community, and sustainability goals, the industrial metaverse can enable expansive and collaborative solutions, particularly in a hybrid work environment. The panelists highlighted the metaverse’s power to drive innovation and progress in the industrial sector by unlocking value and improving efficiency in design.2
Updates on Specific Companies in the Metaverse
Nvidia and Microsoft unveiled a new partnership aimed at providing millions of Microsoft enterprise users with access to Nvidia Omniverse Cloud and Nvidia DGX Cloud via the Microsoft Azure cloud. Nvidia Omniverse Cloud is a comprehensive platform-as-a-service designed for industrial metaverse applications, while Nvidia DGX Cloud offers AI supercomputing services. As part of the collaboration, Microsoft 365 products will also be integrated with Nvidia Omniverse to streamline the development and operation of 3D industrial metaverse applications.3
Sea Limited announced positive Q4 net income in March, demonstrating the underlying strength of its business model. Total net income in Q4 2022 was $422.8 million, up from a loss of $616.3 million YoY. In part, the strong showing in Q4 was due to a $746 million reduction in sales and marketing expenses undertaken by management since the Q3 earnings report. Freezes to salaries and employee headcount were also factors in these savings.
Garena, the Sea Group’s gaming unit where most of its efforts in metaverse technology are housed, saw revenue slip YoY in Q4. Garena’s revenue was $948.8 million in Q4, down from $1.41 billion a year earlier.4
Investing in the Metaverse with MESH ETF
Looking to invest in the Metaverse? The Evolve Metaverse ETF (MESH ETF), is Canada’s first metaverse ETF.
MESH ETF provides investors with an actively managed diversified portfolio of companies involved in the development of the metaverse. To learn more about MESH ETF, please click here: https://evolveetfs.com/mesh/.
Portfolio Strategy and Activity
For the month, Sea Ltd made the largest contribution to the Fund, followed by Nvidia Corporation and Advanced Micro Devices Inc. The largest detractors to performance for the month were Matterport Inc, followed by Synaptics Inc and Walt Disney Co.
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- Edgerton, A., & Barinka, A., “The Metaverse Is Still the Next Big Thing, Meta Insists,” Bloomberg, March 29, 2023; https://www.bloomberg.com/news/articles/2023-03-29/meta-s-clegg-insists-the-metaverse-is-still-the-next-big-thing
- Takahashi, D., “The industrial metaverse: Are we there yet? | GTC panel,” VentureBeat, March 22, 2023; https://venturebeat.com/metaverse/the-industrial-metaverse-are-we-there-yet-gtc-panel/
- “NVIDIA and Microsoft to Bring the Industrial Metaverse and AI to Hundreds of Millions of Enterprise Users via Azure Cloud,” Nvidia, Tuesday, March 21, 2023; https://nvidianews.nvidia.com/news/nvidia-and-microsoft-to-bring-the-industrial-metaverse-and-ai-to-hundreds-of-millions-of-enterprise-users-via-azure-cloud
- Chiang, S., “Singapore’s Sea Group turns profitable for the first time,” CNBC, March 8, 2023; https://www.cnbc.com/2023/03/08/singapores-sea-group-turns-profitable-for-the-first-time.html
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