《花旗银行(Citi GPS):2024颠覆性创新报告(第10期)(英文版)(68页).pdf》由会员分享,可在线阅读,更多相关《花旗银行(Citi GPS):2024颠覆性创新报告(第10期)(英文版)(68页).pdf(68页珍藏版)》请在三个皮匠报告上搜索。
1、Citi is one of the worlds largest financial institutions,operating in all major established and emerging markets.Across these world markets,our employees conduct an ongoing multi-disciplinary conversation accessing information,analyzing data,developing insights,and formulating advice.As our premier
2、thought leadership product,Citi GPS is designed to help our readers navigate the global economys most demanding challenges and to anticipate future themes and trends in a fast-changing and interconnected world.Citi GPS accesses the best elements of our global conversation and harvests the thought le
3、adership of a wide range of senior professionals across our firm.This is not a research report and does not constitute advice on investments or a solicitations to buy or sell any financial instruments.For more information on Citi GPS,please visit our website at GPS:Global Perspectives&Solutions May
4、2024Ten More Things to Stop and Think About Disruptive Innovations X Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 Rob Garlick Head of Innovation&Technology Citi Global Insights Ashiq Mubarack U.S.SMID Biotech Analyst Citi Research Yigal Nochomovitz,Ph.D.U.S.SMID Biotech Analyst Citi Rese
5、arch Peter Verdult,CFA Managing Director,Global Pharmaceuticals Citi Research Ronald Josey U.S.Internet Analyst Citi Research Wenyan Fei Analytical Insights Team Citi Global Insights Adam Spielman Head of Future of Health Citi Global Insights Amy Thompson Social Economist Citi Global Insights Canber
6、k Benning Future of Health Team Citi Global Insights Jason Gursky U.S.Aerospace and Defense Analyst Citi Research Peter Lee Asia Pac Semiconductors&Components Analyst Citi Research Avinash Mundhra Business&Professional Services Citi Research Marc VanT Sant Commercial&Professional Services Citi Resea
7、rch Arthur Truslove Commercial&Professional Services Citi Research Thomas A Singlehurst,CFA Head of EMEA EMT Sector Citi Research Ygal Arounian U.S.Internet Analyst Citi Global Insights Maxwell Moore U.S Internet Research Team Citi Research Tahmid Quddus Islam Citi Global Insights Ronit Ghose,CFA He
8、ad of Future of Finance Citi Global Insights Sophia Bantanidis Future of Finance Analyst Citi Global Insights Kaiwan Master Future of Finance Analyst Citi Global Insights Ronak S Shah Future of Finance Team Citi Global Insights Maggie Xueting Lin Commodities Citi Research May 2024 Citi GPS:Citi GPS:
9、Global Perspectives&Solutions 2024 Citigroup 3 DISRUPTIVE INNOVATIONS X Ten More Things to Stop and Think About Whats the next big thing coming down the pike?Citis Disruptive Innovations series addresses this vital question head-on.This is the 10th edition,each showcasing Ten Things to Stop and Thin
10、k About,with a quick write-up on each.As such,with this years picks we now have a catalog of 100 innovations,and weve added data sets and process around identifying innovation themes,too.The report offers another diverse list of ideas from Citi experts as follows:Antibody Drug Conjugates ADCs combin
11、e the potency of chemotherapy with the precise targeting on monoclonal antibodies in the war against cancer.Approvals have been granted and revenues look set to rise.Autonomous Agents Digital assistants will increasingly be powered by Artificial Intelligence to carry out useful tasks.Large language
12、models have captured the imagination over the last 18 months.Large action models could be next.FemTech Women are less well served than men in many health areas,including diagnosis,therapeutics,and pain management.FemTech can help close the gender health gap.Joint All-Domain Command and Control JADC2
13、 uses sensors,communication,and AI capabilities to materially reduce critical decision-making timelines and deal with military threats across air,land,sea,space and cyberspace.Neuromorphic Computing Architecture Computing will take on more human brain-like architectures to reduce the bottlenecks bet
14、ween logic and memory as AI-related computing demand rises.Piezoelectric Roads Smart roads could harness electricity generated by vehicles travelling across these new roads.Quantum Sensing Sensors are the eyes and ears of our technological world.Quantum sensors can provide an unprecedented level of
15、detail to generate new insights and aid decision making across multiple industries.Retail Media Digital adverts tied directly into a retailers website,or on third-party websites,are growing fast in part due to stricter data privacy standards.Smart Money Generative AI has revolutionary potential in f
16、inancial services,expanding the uses cases of ML and AI into unstructured data to change customer service,sales and marketing,content generation and coding.White&Gold Hydrogen Naturally occurring hydrogen sources are trapped below the earths surface in underground deposits.Exploration techniques are
17、 being looked at by governments and private companies alike.We hope you enjoy digging further into these in Citis Disruptive Innovations X.2024 CitigroupDisruptive Innovations X:Ten More Things to Stop and Think AboutAntibody Drug ConjugatesAntibody drug conjugate payloads are 100-1,000 x more poten
18、t than chemotherapy in killing cancer cellsAutonomous AgentsAI assistants could reduce headcount in customer support functions 20%-30%by 2026.JADC2Joint All-Domain Command and Control(JADC2)could reduce the U.S.militarys decision-making times from days or weeks to minutes.FemTechOnly 4%of healthcare
19、 research dollars go to womens health issues,underlining the scale of the unmet needNeuromorphic Computing ArchitectureNeuromorphic computing could see adoption starting by end-2026.Piezoelectric RoadsConverting 5%of U.S.roads to piezoelectric could power 5,000 households for a year.White and Gold H
20、ydrogenDrilling for underground“white”hydrogen could be a clean source of hydrogen fuel.Smart MoneyAI in Finance:2/3 of work in banking and insurance could be automated or augmented by AIQuantum Sensing1 second per 300 billion years:Accuracy of optical atomic clocks using quantum sensing.Retail Medi
21、a$110 billion Global retail media market(excluding China)forecast by 2027.Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 6 Contents Introduction 7 Antibody Drug Conjugates 11 Autonomous Agents:AI Assistants on the Rise 17 FemTech 22 Joint All-Domain Command and Control 27 Ne
22、uromorphic Computing Architecture 33 Piezoelectric Roads:The Next Smart Road 37 Quantum Sensing 43 Retail Media 50 Smart Money:AI in Finance 55 White and Gold Hydrogen 59 Further Reading on Innovation 64 May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 7 Introduction In 10 edi
23、tions of Citis Disruptive Innovations,weve identified several innovations early in their lifecycles.And of course,weve had a number that have failed to meaningfully take off yet like flying taxis.But rather than use this intro to highlight our misses or do selective victory laps,here are a few data
24、sets that may help you think about where weve been and where were going.Engineering objectivity Citi GPS started in 2011 and included a diverse set of thematic reports.At the time,clients rightly asked whether there was a way of objectively looking at themes versus each other.It turns out there wasn
25、t.This led to the birth of a related product in 2013 from Citi Research called the Global Theme Machine.The Theme Machine weights exposure of over 5,000 publicly traded stocks to 90 themes,with significant analysis added using style factors,correlation,and other quantitative methodologies.In additio
26、n,the Theme Machine allows us to answer simple questions such as how different themes have performed over various time horizons.For example,in Figure 1,we show the best-and worst-performing themes from the original list over the past 10 years.Figure 1.Top-and Bottom-Ranked Themes 10Y Return Source:C
27、iti Research,MSCI New themes have been added over time.For example,Energy Storage was added in 2015,Virtual Reality in 2016,and Artificial Intelligence in 2017.When we look at the last 3-year performance in Figure 2,the picture is very different from the 10 year-view.While many themes seem to be end
28、uring in theory,they often fall in and out of favor.The Theme Machine helps explain why.Timing also matters,and ideas can often be premature,taking a long time to go from germination to mass adoption.Figure 2.Top-and Bottom-Ranked Themes 3Y Return Source:Citi Research,MSCI Rob Garlick Head of Innova
29、tion&Technology Citi Global Insights Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 8 Is the high innovation period behind us?The Theme Machine only looks at listed companies.A large part of new innovation of course takes place via Venture Capital(VC)and we analyze which the
30、mes the VCs are backing in another Citi product called Mapping Innovation1.As seen in the chart below,the private market funding environment for innovation soared in the decade into 2021,rising 11-fold.Rising interest rates punctuated the VC investment wave with 2023 capital investment declining 52%
31、to levels seen 6 years ago.Will a decline in innovation follow?Figure 3.Investment in Private Companies(2010-2023)Source:Pitchbook Data Inc Citi Global Data Insights(CGDI)notes that examining the patent landscape globally,a step earlier in the innovation life cycle than VC funding,patents declined g
32、lobally in both 2022(-7%)and 2023(-13%).This may have been a Covid-19 anomaly,but combined with declines in VC capital being deployed,it is worth noting.The hope of course is that Generative AI is about to unleash a significant new wave of innovation,capital,and productivity.A generation of new Eins
33、teins would be great,but the capabilities of bigger computers have become increasingly significant.AI became the largest area of VC funding in 2023.It may be surprising how concentrated the VC market is with funding dominated by two sectors:technology(38%)and healthcare(19%).Our Disruptive Innovatio
34、n series has been more diverse,with 18%of our ideas in the Healthcare sector and 14%in Technology.Green Energy ideas occupied the top slot(at 20%),followed by Finance(13%),Consumer(12%),Industrials(11%,including Transportation),and Communications(8%).Exciting and substantial change areas exist in Te
35、chnology and Healthcare,but several other huge changes are taking place including the retooling of the worlds energy and power sectors,a reimaging of the worlds transport sector(from autonomous vehicles to air-taxis),or the growth of Blockchain and Web3.0 in Finance.So,despite the pullbacks in VC fu
36、nding and patents,theres no shortage of interesting innovation.1 Mapping the Innovation Landscape:Comparing 100 Emerging&Disruptive Technologies,Business Models,and Ideas May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 9 Figure 4.Investment in Private Companies by Overall Sec
37、tor and Specific Industry 2023 Source:PitchBook Data Inc.How big?A big factor behind any new area of innovation is how big the market can become,a measure known as TAM(Total Addressable Market).Citis Mapping Innovation report offers a unique data set on 100 theme TAMs out to 2030.Many of these cover
38、 ideas from our Disruptive Innovations series.Figure 5.Forecast Growth Rate(2023-2030)vs.Current Market Size(2023)for Areas of Innovation Black=Technology;Green=Sustainability;Blue=Prosperity Source:Various 3rd-Party Sources Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 10
39、When looking at 2023 TAMs versus CAGRs to 2030,we note:as expected,AI has a combination of a high current market size and high growth,but space and IOT are also in this top right quadrant;metaverse and 5G networks do not get as much airplay currently,but still have very high growth rates and large T
40、AMs;bottom-right,agriculture demand has a large TAM and robust growth CAGR;in the top-left quadrant,Carbon Markets forecast growth stands out.Whats coming next?Since our first Disruptive Innovation report in 2013,Citi has added data sets to allow analysis of a growing list of innovation ideas.A ques
41、tion that often gets asked when we present a long list of ideas and data is:whats next?This report aims to provide the answers.We ask Citi experts for new areas of innovation they find interesting and select a varied list that we hope will make readers stop and think.The summary of the ten ideas fro
42、m this 10th report is found on page 3,with more detail in the pages that follow.How our next 10 innovation ideas captured in this report plug into the innovation data sets described above is of course yet to be determined.Some areas are already substantial in revenue generation such as Antibody Drug
43、 Conjugates or Retail Media.In many other cases,the topics could become big one day but are still nascent such as Neuromorphic Computing,Piezoelectric Roads,or White Hydrogen.In other cases,it appears that new markets could grow very quickly such as Autonomous Agents,FemTech,Joint All-Domain Command
44、&Control,GenAI in Finance,or Quantum Sensors.For some of these topics,we already have in-depth reports that can provide more detail.Others are coming,and we welcome feedback on which areas would benefit from further exploration,or indeed which topics we may have missed.In the meantime,we hope you en
45、joy dipping into these fresh innovation ideas.May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 11 Antibody Drug Conjugates Antibody drug conjugates(ADCs)have become a critical weapon in the war against cancer and have already disrupted the treatment of many cancer types.Concep
46、tually,ADCs combine the potency of chemotherapy with the precise cancer-targeting capabilities of monoclonal antibodies into a safer and more effective package.Sales of the eleven currently FDA-approved ADCs are expected to more than double by 2026 to around$10.3 billion in the U.S.alone according t
47、o a consensus analyst estimate from VisibleAlpha.Despite this growth,we believe the ADC storyline remains in its infancy.Technological advancements in individual ADC components are now overcoming key historical limitations,thus allowing for further innovation in oncology.Additional variations of ADC
48、s such as radiopharmaceuticals and immune-stimulating ADCs are being rapidly commercialized and clinically developed.Researchers are also exploring the potential of ADCs in areas outside of oncology such as autoimmune disease and infectious disease.Large pharma is investing heavily in the promise of
49、 ADCs through significant deal-making,most prominently including Pfizers acquisition of Seagen,announced in 2023.Overall,we believe technological improvements and significant investment by large pharma companies mean ADCs will increasingly disrupt and improve the treatment of cancer.This chapter giv
50、es a conceptual overview of ADCs and discusses their commercial potential,improvements in ADC technology,large pharma deal-making around ADCs,and other future areas of potential for ADCs.Setting the Stage Historically,cancer treatments can be divided into five main pillars:(1)surgery,(2)chemotherapy
51、,(3)targeted therapy,(4)radiation,and(5)immunotherapy.In this chapter,we focus on chemotherapy,radiation,and immunotherapy.Chemotherapy was introduced in the 1940s and offered a potent way to kill rapidly dividing(cancerous)cells.The problem with chemo is that it is a very imprecise and toxic way to
52、 attack cancer,causing significant damage systemically to non-cancerous areas in the body,resulting in a very poor side-effect profile.Radiation dates back even earlier,with Chicago physician Emile Grubbe claiming to have treated a breast cancer patient with x-rays in 1896.Over the next 100 or so ye
53、ars,the field of radiology grew more sophisticated,with the addition of radium and other isotopes to the radiation treatment arsenal and the introduction of more sophisticated delivery technologies such as external-beam therapy or brachytherapy.The problem with radiation is that it,too,is an impreci
54、se way to kill cancers,resulting in irradiation of surrounding non-cancerous tissues and frequently causing secondary cancers to arise.Immunotherapy,the idea of hijacking the bodys immune system to attack cancer cells,has seen the most significant cancer treatment innovation in recent years.One of t
55、he foundational advances in immunotherapy was the introduction of monoclonal antibodies to the cancer treatment paradigm.Monoclonal antibodies,which are Y-shaped proteins,were introduced starting in the 1980s and offer a much more precise way to target cancers,binding to cell surface markers that ar
56、e primarily found only on cancer cells and not healthy tissue(Figure 6).Once bound,the monoclonal antibody can activate and guide the immune system straight to the cancer.The problem with monoclonal Ashiq Mubarack U.S.SMID Biotech Analyst Citi Research Yigal D Nochomovitz,Ph.D.U.S.SMID Biotech Analy
57、st Citi Research Peter Verdult Managing Director,Global Pharmaceuticals Citi Research Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 12 antibodies is that they do not offer direct intrinsic cancer-killing capabilities.Instead,they require the antibody to hijack the immune sy
58、stem to attack the cancer or have anti-cancer effects via other secondary mechanisms.Figure 6.Monoclonal Antibodies Can Precisely Target Cancer Cell Surface Proteins Source:Citi GPS Enter the Antibody Drug Conjugates An ADC is a monoclonal antibody with a very small amount of highly potent chemother
59、apy chemically attached to it via a“linker.”The benefit of this design is that an ADC not only has the potency and cancer-killing capabilities of chemo,but also the precise targeting capabilities of a monoclonal antibody.Theoretically,an ADC approach could be much safer than traditional chemo given
60、the targeted destruction of cancer cells.ADCs are designed deliberately and are generally composed of three parts(see Figure 7):A monoclonal antibody backbone targeting a chosen specific cancer protein marker.Once locked onto the target protein,the ADC can enter the cancer cell via a process called“
61、internalization.”A cytotoxic payload(aka chemo)carried by the monoclonal antibody into the cancer cell.These payloads,while delivered in small amounts,are 100-1,000 x more potent than standard chemo options.A chemical linker attaching the cytotoxic payload to the monoclonal antibody.Once inside the
62、cancer cell,the chemical linker is clipped by enzymes,allowing the freed payload to kill the cancer cell.The process through which the linker is May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 13 attached to the monoclonal antibody is called“conjugation”;hence,the name antibo
63、dy drug conjugate.Figure 7.ADCs Carry Chemo Payloads into Cancer Cells,Resulting in Precise Tumor-Killing Source:Citi GPS In theory,because they specifically target cancer cells and not healthy tissues,ADCs can be far safer than chemotherapy and offer a wider therapeutic window(ie,range of efficacio
64、us doses)(Figure 8).Figure 8.ADCs Can Increase the Therapeutic Window of Chemotherapy Source:Citi GPS Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 14 Technology Improvements Are Now Allowing ADCs to Reach Their Full Potential Since 2011,11 ADCs have been approved and are c
65、urrently available on the market for use in a wide variety of solid and hematologic cancers(excluding Blenrep,which was withdrawn in November 2022).Many approved and previously discontinued ADCs faced significant safety challenges in patients,mainly because of limitations in protein,linker,conjugati
66、on,and chemo payload engineering.For example,a common problem and past reason for poor ADC efficacy and safety was an unstable linker.One can imagine that if the linker disintegrates too soon in the body,the payload would be unintentionally released prior to the ADC reaching the cancer,thus causing
67、chemo-like systemic toxicities and negating the targeted benefits of the monoclonal antibody.That said,protein,linker,conjugation,and chemo payload technologies have all improved dramatically in recent years,allowing for:(1)a more stable ADC product;and(2)increased efficacy and safety.These improvem
68、ents have advanced the promise of ADCs and have accelerated research and investment interest from both biotech and pharma.Note that eight of the 11 available ADCs were approved in the past five years alone,highlighting this acceleration(Figure 9).Figure 9.Timeline of ADC FDA Approvals for Cancers So
69、urce:Citi GPS The 11 approved ADCs have been proven to be commercially viable,with sales expected to grow to over$10 billion by 2026 in the U.S.alone,doubling from 2023 projections(Figure 10).One of the key commercial advantages of ADCs is their design complexity.The inclusion of multiple components
70、(each with its own intellectual property)means they may be difficult for biosimilar(generic)competitors to replicate.Because of this,ADCs could have long,uninterrupted commercial lives compared with other oncology agents,which are easier for generic competitors to replicate.Pfizer reported this dyna
71、mic 2as a key reason for its acquisition of leading ADC company Seagen.2 Pfizer website,“Pfizer Invests$43 Billion to Battle Cancer|Pfizer”,March 13,2023 May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 15 Figure 10.Currently-Approved ADCs Are Expected to Generate Over$10 Bill
72、ion in Sales in the U.S.($mn,2018-26E)Source:Visible Alpha,Citi GPS The ADC Field Continues to Innovateand Big Pharma Is Taking Notice Given the improving technology and increasing commercial success,the field of ADCs continues to innovate and broaden its reach.There are currently around 300 ADCs in
73、 preclinical and clinical development covering a wide range of cancer types.Substantial M&A activity around ADCs(and similar payload-bearing therapeutics)highlights interest from both big biotech and pharma.Outside of M&A,dealmaking around ADCs has also been done through large collaboration and part
74、nership agreements.There are too many examples of ADC partnerships and collaborations to list here,though the largest historically was signed in October 2023.We believe the significant investment being made by large pharma into ADCs and similar modalities highlights the promise of the class and is d
75、riving further R&D spending.Other variations of ADCs,which are also being rapidly commercialized and clinically developed,include:Radiopharmaceuticals:Radiopharmaceuticals are conceptually very similar to ADCs.The key difference is the use of a radioactive isotope in place of a cytotoxic chemotherap
76、y payload.Radiopharmaceuticals can be thought of as a more precise way to deliver radiation to cancers(see the“Radiation”discussion on the first page of this chapter),analogous to ADCs being a more precise way to deliver chemotherapy.Radioisotope payloads are orders of magnitude more potent than che
77、mo payloads and importantly do not require“internalization”to kill the cancer cell,given that radiation from the isotope is lethal even if externally located to the cancer cell.Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 16 While they are more potent,the radiation emissio
78、n makes storage and use of radiopharmaceuticals logistically more challenging than ADCs.Radiopharmaceuticals require the use of specialized radiation oncology and nuclear medicine facilities and thus are not easily utilized by community oncologists.Unlike cytotoxic chemo payloads,which are stable in
79、 storage,radioisotopes face the challenge of very short half-lives,limiting the shelf life of radiopharmaceuticals to as little as a few days post-manufacturing.Nonetheless,radiopharmaceuticals have been proven commercial successes in the treatment of cancer(eg,Xofigo,Lutathera,and Pluvicto).Dealmak
80、ing in the radiopharmaceutical field is also very active.Immune-stimulating ADCs(ISACs):ISACs are a variation of ADCs that utilize an immune-stimulating payload instead of a cytotoxic chemo payload.Cancers generally utilize multiple mechanisms to escape recognition by the bodys immune system.The ide
81、a with ISACs is to stimulate immune signaling in cancer cells,thereby potentially allowing the immune system to recognize and destroy the cancer cell.ISACs have yet to show meaningful clinical efficacy in late-stage studies,though the industry continues to invest heavily in R&D.ADCs for use outside
82、of cancer:Most ADC development is focused on oncology.However,there is growing interest in utilizing ADCs for the targeted killing of pathogenic cells in other disease areas.For example,in autoimmune diseases,ADCs could be used to destroy out-of-control immune cells driving the disease.Similarly,ADC
83、s could be used to destroy infectious diseases.They could therefore contribute to solving the problem of antibiotic resistance,which is drawing rising concern.These areas are currently under investigation by researchers.May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 17 Auton
84、omous Agents:AI Assistants on the Rise Digital assistants are already among us.Most of us think nothing of asking them to play some music,help us avoid traffic,or point us in the direction of the best meal in town.As the full impact of AI is realized,how much more help might we need or be offered?We
85、 think the answer is a lot,and we believe digital assistants and agents will play an increasingly central role in our lives across a range of use cases.We are already beginning to see the adoption of AI agents and the benefits they offer to engagement,commerce,and customer service.OpenAI has seen ad
86、option across consumers(c.100 million weekly active users),developers(over 2 million),and businesses(OpenAI has partnered with 92%+of Fortune 500 companies).3 Snaps My AI counted over 200 million users in October 2023,and these users have generated over 20 billion cumulative messages since the tools
87、 launch in February 2023(or around 2.5 billion messages per month),suggesting around 100 messages per user.4 Usage spanned across shopping(over 16 million conversations on clothing and apparel),travel(over 5 million conversations on top tourist destinations),and food and dining(over 5 million conver
88、sations on restaurant recommendations).5 In many ways,this engagement is a form of search.Metas LLaMA(large language model Meta AI)-based code generation models have been downloaded over 30 million times through the Hugging Face platform.6 Digital Assistants Upgraded to“AI Assistants”Through Large L
89、anguage Models We believe the next frontier area of AI innovation is autonomous agents.Almost all U.S.-based developers(92%)are already using AI coding tools both in and outside of work,according to a June 2023 GitHub Survey.7 Building upon their ability to understand instructions and turn them into
90、 lines of code that can be executed by computers,large language models(LLMs)can be fine-tuned to go beyond simply interacting with humans or producing code.Instead of prompting the LLMs with a single line of instruction,more complicated goals can be inputted that may take multiple steps to achieve(e
91、g,call a taxi,book a flight,reserve a table).We can“teach”LLMs how to complete such tasks with memories and loops prompting them to break the task down into sub-tasks,come up with an execution plan,and follow that plan step by step.3 Jon Porter,“ChatGPT Continues to Be One of the Fastest-Growing Ser
92、vices Ever,”The Verge,November 6.2023.4 Andrew Hutchinson,“Snapchat Crosses 400M Users,Sees Revenue growth in Q3,”Social Media Today,October 24,2023.5 Riyah Shah,“New AI Features for Snapchat,Includes AI-Generated Snaps&News Tools,”Social Nation,December 31,2023.6 Jonathan Vanian,“Metas Unique Appro
93、ach to Delivering AI Puzzles Wall Street,But Techies Love It,”CNBC,October 16,2023.7 Inbal Shani and Github Staff,“Survey Reveals AIs Impact on the Developer Experience,”Github Blog,June 13,2023.Ron Josey U.S.Internet Analyst Citi Research Wenyan Fei Analytical Insights Team Citi Global Insights Cit
94、i GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 18 In this way,LLMs can be tuned to function as agents or digital assistants to humans for tasks.Toran Bruce Richards,the founder of the video game company Significant Gravitas,made this a reality first in late March 2023 when he l
95、aunched a prototype application called Auto-GPT on GitHub.It quickly took GitHub by storm and was ranked 24th among over 370 million project repositories on the site as of January 9,2024.8 Mustafa Suleyman,CEO of Inflection AI and co-founder of DeepMind,mentioned in a September 2023 interview with t
96、he Financial Times that he expects to see AI systems to add applications including“a very coherent expert role that can coordinate and decide and plan and reason and use its judgment”in the near future.9“In future,AI is going to be participating in the economy in a material way,unlike the way that E
97、xcel participates in the economy.Its going to be orchestrating actions using APIs application programming interfaces,”he said.“Its going to be booking and buying and planning and organizing.”AI Assistants for Consumers GPT-4 has already demonstrated its ability to design and execute chemistry experi
98、ments,browse the web,and use software tools including other AI models.In November 2023,OpenAI offered more flexibility to users by launching new GPTs at its first ever Developer Day.GPTs are customizable AI assistants that users can create on their own with specific instructions,domain knowledge,and
99、 any combination of skills for specific purposes.Users can now fully leverage the power of the latest LLMs and move beyond having conversations to executing calls to many external tools,including various apps and web browsers,to complete tasks.Within 48 hours of launch,over 10,000 GPTs were created
100、by users,with some examples noted in Figure 11.Figure 11.Examples of GPTs Source:Citi GPS,OpenAI 8 GitHub,“GitHub Ranking:Top 100 Stars,”accessed January 9,2024.9 Richard Waters,“U.S.Should Use Chip Leadership to Enforce AI Standards,Says Mustafa Suleyman,”Financial Times,September 1,2023.May 2024 C
101、iti GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 19 Meta launched its own AI assistant,Meta AI,and 28 verticalized AI personalities(based on celebrities)that are intended to drive incremental engagement across Metas family of apps(including WhatsApp,Messenger,Instagram),while its Meta-p
102、owered Ray-Ban smart glasses and Quest 3 mixed reality headset have incorporated Meta AI into the devices.The AI assistant also leverages Metas search partnership with Bing that enables the LLM to get real-time info updates and includes an image generation tool.Potential use cases include cooking,tr
103、avel,and sports.Google launched its AI assistant,Bard,in February 2023 and has evolved its search function with the introduction of Search Generative Experience(SGE)to create a more interactive,conversational internet experience.These offerings represent the early evolution of what could be the futu
104、re state for Google Search,with Bard in particular representing an incremental surface for user engagement and unlocking new query types(ie,follow-up conversations).Future use cases could be even broader than anticipated intelligent digital assistants may be able to perform more complex physical tas
105、ks by linking to intelligent robots,or embodied AI assistants.We also expect AI to bring a massive upgrade to current digital assistant models like Apples Siri,Amazons Alexa,and Google Assistant.This will in turn lead to faster adoption of digital assistants.Total Addressable Market(TAM)Analysis for
106、 Consumer Market To assess the opportunity in this area,we break down the consumer digital assistant device market into eight different segments:(1)smartphones,(2)laptops,(3)desktops,(4)smart speakers(eg,Alexa),(5)tablets,(6)smartwatches,(7)connected cars,and(8)smart TVs.We then model two different
107、scenarios:(1)the base case and(2)the upside case.10 In our base case scenario,we assume the total number of devices with digital assistant capabilities will grow from 12 billion to 16 billion units by 2030.We discuss revenue models and see a wide range of potential market sizes by 2030,from$57 billi
108、on to$339 billion,as shown in Figure 13.The key takeaway is the digital assistant market is likely to become a big new market.In turn,this will likely attract more capital,drive more innovation,add more value,increase penetration,and create a battle to become your preferred intelligent digital assis
109、tant.Figure 12.Total Number of Digital Assistant Devices(by device,in bns)Figure 13.2030 Digital Assistant TAM Sensitivity Table(in$bns)Premium Model Monthly Subscription Fee($)3.0 3.5 4.0 4.5 5.0 5.5 6.0%Devices Subscribed to Premium Model 10 56 66 75 85 94 104 113 15 85 99 113 127 141 155 169 20 1
110、13 132 151 169 188 207 226 25 141 165 188 212 235 259 282 30 169 198 226 254 283 311 339 Source:Citi Global Insights Source:Citi Global Insights 10 For more information,see Citi Global Insights,AI Time:AI Assistants Are Coming for You,August 1,2023.Citi GPS:Citi GPS:Global Perspectives&Solutions May
111、 2024 2024 Citigroup 20 AI Assistants for Enterprises Workplace Productivity AI-powered digital assistants can make a big difference by helping with simple tasks such as emails in 2021,the average U.S.employee spent around 2.5 hours per day checking emails.And that does not include the nonstop pings
112、 from Slack,Teams,Skype,or Google Chat.Microsoft launched Copilot,its GPT-powered assistant,for Microsoft 365 applications and services in 2023.The Copilot assistant is in essence a form of Auto-GPT that is fine-tuned to complete designated tasks for Microsoft Office.The Outlook Copilot,for example,
113、can help users triage their inbox,prioritize important and urgent emails,summarize long email threads,and draft replies.An internal study of Copilot at Microsoft in November 2023 found 70%of users felt more productive,and overall,users were 29%faster in a series of tasks 64%of users spent less time
114、processing email,85%of users said they could write first drafts faster,and 75%of users said Copilot saved time by finding content across files.11 In a survey that includes over 2,000 developers on the GitHub Copilot system,the average time for a software developer to complete the same coding task is
115、 71 minutes with Copilot versus 161 minutes without Copilot a 55%boost in productivity.Further,88%said they were more productive,74%said they could focus on more satisfying work,and 77%noted it helps them spend less time searching for information or examples.12 Freeing users from repetitive tasks al
116、lows them to focus on more creative opportunities.As one senior software engineer said,“(With Copilot)I have to think less,and when I have to think its the fun stuff.It sets off a little spark that makes coding more fun and more efficient.”13 Customer Service and Engagement AI-powered agents can imp
117、rove customer engagement.For example,imagine a Taylor Swift-trained bot that directly interacts with her fans.Or,picture a brand creating an LLM-based customer service agent that could improve conversion rates and sales.As the use cases of agents evolve,we believe search and social usage,ad budgets,
118、and customer service are likely to evolve as well.Through the help of an AI assistant and more natural language queries,users can find new products that suit their preferences,purchase a product,and receive ongoing product support,all without the involvement of human representative.As an example,a u
119、ser could click on a future Facebook ad for a shirt or sweater;ask follow-up questions about the material,price,or delivery;and then purchase the product in the same conversation.This more seamless purchase experience(potentially from an ad in a users feed)could improve conversion rates,which could
120、lead to greater ad revenue and overall revenue across search,social,and the broader Internet.11 Microsoft,“What Can Copilots Earliest Users Teach Us About Generative AI at Work?”,November 15,2023.12 Eirini Kalliamvakou,“Research:Quantifying GitHub Copilots Impact on Developer Productivity and Happin
121、ess,”GitHub Blog,September 7,2022.13 Ibid.May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 21 AI assistants could also generate cost savings and efficiency across customer service operations by improving agent productivity and automating a greater volume of customer interactio
122、ns.Toward productivity,a McKinsey analysis suggests that generative AI applied to customer care functions could improve productivity by 30%-45%,which could prove conservative as the AI assistants evolve.14 And with improving AI assistant capabilities,Gartner projects customer service and support age
123、nt organizations can operate at an approximately 20%-30%lower headcount by 2026.15 In the business-to-business(B2B)domain,OpenAI supports business applications by offering plugins(eg,ChatGPT can be leveraged for Expedia,Instacart,and Shopify)and is beta-testing an Assistants API to support custom AI
124、 assistant development.Meta is also launching AI Studio,which will enable businesses and creators to build custom bots in a low-or no-code environment using Metas Llama 2 LLM.We believe this initiative could drive agent adoption,increase customer engagement,and improve monetization for advertisers.C
125、EO Mark Zuckerberg suggested it could be broadly available in 1H 2024,and the service could be a natural complement to Metas Click-to-Message ad product.We can envision a world whereby celebrities and small and midsized businesses can train agents to chat with fans or customers.Innovation is also ta
126、king place at Google,with Duet AI(a productivity AI assistant)and a Vertex AI platform built on Googles core generative AI capabilities based on PaLM 2(and soon to be Gemini)LLM,allowing businesses to build(or leverage pre-built)AI models,assistants,APIs,and applications within Google Cloud.A genera
127、tive AI upgrade of the Google Assistant is currently underway.While enterprise adoption can take longer than consumer adoption,the enterprise market for AI assistants is likely to be significant.Based on the productivity opportunities it can deliver,Microsoft is charging$30 per month for its new Cop
128、ilot services.This contrasts the$3-$6 per month average revenue per user(ARPU)we modeled in our consumer market scenarios.The conclusion,however,is similar AI assistants are coming for you.14 Michael Chui et al.,“The Economic Potential of Generaitve AI,”McKinsey&Co,June 2023.15 Gartner,“Customer Ser
129、vice and Support Leaders Should Assess Generative AI Technology Options to Enhance Their Organizations Function,”August 2023.Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 22 FemTech What Is FemTech?The word“FemTech”was coined in 2016 by Ida Tin,one of the cofounders of the
130、period-tracking company Clue.She wanted to help“legitimize the female health tech market,thus driving forward innovation,attracting investment,and helping to normalize conversations about female health.”16 The sector ranges from products that might be thought of as“consumer”for example,simple period
131、-tracking apps to ones that use deep science,for example,prescription drug development.However,the space is a continuum:Period-tracking shades into contraception and fertility and these areas can be highly medicalized.It is possible to argue that the period-tracking app on the Apple Watch is purely
132、a consumer product,but often period tracking has a quasi-medical function.Between a third and a half of users use the technology purposefully either to try to become pregnant,or to avoid doing so.Female-friendly medical devices shade into consumer products.One example comes from the Matrix Female He
133、alth&Care.This is a pre-seed start-up that is looking to redesign the speculum a device thats been around since Roman times and replace it with something that is much more pleasant for women patients and,as a result,ends up looking as much like a consumer product as a medical one(Figure 14).BioPharm
134、a,MedTech,and health service companies focusing on womens health.One leading biopharma company focuses on therapeutics mainly for women in areas including reproductive health,heart disease,oncology,immunology,dermatology,allergy,and asthma.CooperSurgical is a division of a company that develops medi
135、cal devices and services mainly used for fertility and OB/GYN surgical procedures,including reproductive genetics and ART or assisted reproductive technology.Figure 15 focuses just on startups,showing the split by vertical.The dark blue bars represent issues having to do with maternity and what is s
136、ometimes called“bikini medicine”;the royal blue shows more general issues related to womens health.17 Not only does the chart show that the biggest focus of investment is in maternal and menstrual health and fertility,but it also shows that that general womens medicine remains much less of a priorit
137、y than bikini medicine.16 Femtech.Live,“FemTech Founder:An Interview with Clue CEO,Ida Tin,”February 11,2021.17 The term“bikini medicine”refers to the mistaken belief that womens health only differs from mens in the parts of the body that a bikini would cover.See:George Institute for Global Health,“
138、Time to Shift Research Focus From Bikini Medicine to What Is Really Ailing Women,”March 30,2022.Adam Spielman Citi Global Insights Amy Thompson Social Economist Citi Global Insights Canberk Benning Citi Global Insights May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 23 Figure
139、 14.Proposed Replacement for Speculums Source:Matrix Health and Care Figure 15.FemTech Startups by Subsector(Number of Companies)Source:Citi GPS,FemHealth Insights Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 24 Growing,But Not Huge Figure 16 shows that although the number
140、 of FemTech startups has risen significantly over time,the total number is relatively modest.So far,about half are in North America and a quarter in Europe.Figure 16.Number of FemTech Companies Founded Figure 17.FemTech Companies by Region Source:FemTech Analytics,Citi Global Insights Source:Pitchbo
141、ok,Citi Global Insights Why Is FemTech Needed?There is plenty of evidence that women are less well-served in many domains by the healthcare ecosystem from individual healthcare providers through to ongoing research and development than men.We see three distinct issues:worse diagnosis,worse therapeut
142、ics,and worse pain management.Worse diagnosis:Women are more likely to be misdiagnosed or diagnosed late.For example,women are more likely to receive an incorrect diagnosis for serious cardiovascular events like heart attacks and strokes.18 Worse therapeutics:There are insufficient safe and effectiv
143、e therapeutics for women.Worldwide,women account for around 60%of adverse drug reactions,with modest variation globally.19 There is a particular problem for pregnant women because very few drugs are tested for safety and efficacy on pregnant women.20 In fact,only 4%of healthcare research dollars go
144、to womens health issues which explains why relatively common issues like endometriosis are under-researched.Worse pain management:First,it appears that women suffer more pain.Between 45%and 95%of women who menstruate experiencing dysmenorrhea,18 British Heart Foundation,Bias and Biology:How the Gend
145、er Gap in Heart Disease Is Costing Womens Lives,September 2019;David E.Newman-Toker et al.,“Missed Diagnosis of Stroke in the Emergency Department:A Cross-Sectional Analysis of a Large Population-Based Sample,”Diagnosis(Berlin,Germany),Vol.1,No.2,April 3,2014.19 We must note that adverse drug reacti
146、ons in men were more likely to be serious or fatal,and there is a gap in understanding the difference between men and women in that direction as much as the one being highlighted in this report.20 Martina Ayad,MD and Maged M.Constantine,MD,“Epidemiology of Medications Use in Pregnancy,”Seminars in P
147、erinatology,Vol 39,No.7,September 8,2015.11 13192635 34556378700300Asia13%MENA6%ANZ3%LATAM2%Africa2%North America48%Europe26%May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 25 which is painful menstruation that cannot be explained by any named
148、 disease.21 In addition,half of chronic pain conditions are more common in women.22 Furthermore,women are less likely to receive pain relief and,when they do,they have to wait longer for it.One meta-analysis of numerous studies on gender differences in the treatment of pain concluded that“women rece
149、ive less treatment for pain than men.”23 FemTech will not totally close the gender health gap,but it can help in two ways:FemTech can support women to take full advantage of existing healthcare systems by making them more empowered consumers of healthcare;and The rise of FemTech incrementally shifts
150、 healthcare innovation toward a more equal gender balance by focusing on womens health.Clue,the period-tracking app,is a good example of how FemTech uses digital technology to help women understand their menstrual cycles and if needed communicate about them in detail.Women input data on their menstr
151、ual cycles,and the app generates insights,including predictions on periods and ovulation.It provides insights on cycle lengths to observe patterns and discover how cycles can impact other things,like mood,skin,and energy levels.Clue is free for users,but Clue Plus,which costs 1/month,provides deeper
152、 analysis and more advanced features,including fertility information,pregnancy tracking,and indications of perimenopause.The app has 10 million active monthly users.It has downloads in 190 countries and supports over 20 languages.Unlocking the Value of FemTech Requires the Health Ecosystem to Evolve
153、 Certain structural factors cause companies in many of the subsectors within FemTech to generate low(or even negative)margins.The emerging vertical could have a greater impact if the wider healthcare ecosystem evolved to better support womens health.First,health systems do not provide reimbursement
154、for many womens health issues.Many female-affecting health conditions apply to either effectively all women(like menopause)or a very large percentage(like painful periods).Throughout history,women have simply had to deal with these conditions as best they could.Perhaps as a result,modern healthcare
155、systems generally do not pay for women to access therapeutics for these issues,and products that help address them are rarely reimbursable.Period-tracking apps are an example of the profitability problem.Many of the largest wearables including the Apple Watch and Fitbit offer period tracking 21 Stel
156、la Iacovides,Ingrid Avidon,and Fiona C.Baker,“What We Know About Primary Dysmenorrhea Today:A Critical Review,”Human Reproduction Update,Vol.21,No.6,September 7,2015.22 Natalie R.Osborne and Karen D.Davis,“Sex and Gender Differences in Pain,”International Review of Neurobiology,Vol.164,No.277-307,Ju
157、ne 13,2022.23 Diane E.Hoffmann and Anita J.Tarzian,“The Girl who Cried Pain:A Bias Against Women in the Treatment of Pain,”The Journal of Law,Medicine&Ethics,Vol.29,No.1,March 1,2001.Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 26 effectively for free.Of course,companies l
158、ike Clue offer tools that the wearable companies do not,but it is hard to compete profitably.In theory,period trackers could generate revenue by selling data.But in practice,all the main companies have given absolute commitments that they will never do this.It is hard to imagine many women uploading
159、 information about their menstruation if they thought this would be sold on.Women-friendly medical devices also need to demonstrate value.The medical device segment,often called MedTech,is certainly a profitable industry,with many of the largest companies generating adjusted earnings before interest
160、,taxes,depreciation,and amortization(EBITDA)margins in the high-20s.Typically,the margins for any product depend on how important they are in a clinical sense and the competition in their subsector.A device that enables a unique life-saving procedure is likely to generate much higher margins than(sa
161、y)a(medical)thermometer thats designed for use at home.The question for companies that make female-friendly MedTech products is:to what extent are their customers who are usually healthcare providers,not patients willing to pay a premium.May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024
162、Citigroup 27 Joint All-Domain Command and Control U.S.defense strategy is focused on deterring conflict with enemies,particularly near peers.To accomplish this,the country invests over$300 billion annually in the modernization of its military,including its nuclear arsenal and its more tactical and c
163、onventional systems.Joint All-Domain Command and Control(JADC2)is a military concept created by the Department of Defense(DoD)that aims to improve decision-making timelines through the use of enhanced communications,cloud-based interactions,and artificial intelligence(AI)and utilizing military asset
164、s across all domains including space,air,land,sea,and cyber.The goal is to give the U.S.an advantage on the battlefield,and perhaps to prevent conflict from starting in the first place,by demonstrating that the country can both detect and eliminate enemy targets before even being seen by adversaries
165、.Imagine the following:The President of the United States is awakened early one morning to address an emerging situation.Just minutes prior,a newly formed enemy group assembled a small force that is a potential threat to U.S.special forces units operating overseas.With his top advisors and generals
166、at his side,he looks at a bright digital screen displaying the exact location of the enemy on a satellite map produced by the Air Force,with live video footage from an Army drone depicting the menacing assets.The screen displays an array of available Army,Navy,and Air Force weapons and solutions in
167、the area to efficiently deal with the enemy and protect the soldiers.Within a matter of minutes,the President chooses a plan and executes it,and the threat is promptly neutralized before the enemy forces are even aware of the presence of U.S.special operations units in the vicinity.While we frequent
168、ly see such scenarios in movies,they are largely a fantasy today as timelines using existing technology would take hours,if not days,to provide the President and his military leaders with the intelligence and situational awareness needed to execute such a mission.JADC2 is trying to solve for this us
169、ing a collection of new and existing sensor,communications,and AI capabilities to materially reduce critical decision-making timelines to deal with threats.Its three phases(outlined below)seek to provide a more stable and efficient set of capabilities and procedures across the military to address ex
170、isting and emerging threats:The“Sense”phase involves threat detection using space,air,land,cyber,and sea-based sensors.The“Make Sense”phase involves analysis of the threat using AI.The“Act”phase involves the neutralization of targets.Investments in these areas are likely to be disruptive to the defe
171、nse industrial base,as well as to military leaders as they attempt to adapt to the emerging technologies and operational constructs that will be needed to successfully deploy a military of the future one that relies on cutting-edge sensing and AI capabilities to drive ever-faster decision-making tim
172、elines.While legacy defense contractors are benefiting from these investments given their exposure to existing systems,a cadre of new companies focus on providing ever-more capable solutions at a faster pace,in some cases using non-traditional modes of delivery(ie,delivering a service versus hardwar
173、e that is then operated by a soldier).We expect many of these newer companies to be successful in carving out niches in critical areas of spend over time Jason Gursky U.S.Aerospace and Defense Analyst Citi Research Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 28 given thei
174、r technical know-how,lower costs(ie,pension and improved manufacturing techniques),and corporate structures that afford quicker development timelines.Figure 18.JADC2:The Big Picture Source:Citi Research Sense The initial“Sense”stage involves collecting data from a variety of sources and receptors.In
175、 order to gather as much data as possible,the JADC2 initiative aims to install these sensors into a variety of devices across all domains,such as the Air Forces F-35 aircraft,the Navys upcoming Large Unmanned Surface and Undersea Vehicles,and even satellites deployed by the Space Force.The goal is e
176、ssentially to create a fabric where the combined sensors form an information web,becoming able to transfer relevant and important information to each other with ease.One major hurdle that this stage seeks to address is improving intra-military communications,as each military branch possesses a uniqu
177、e communications system that cannot easily interact with the others.Dubbed Project Convergence,a goal has been set to unify these systems between branches.As of January 2023,May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 29 the project has included the Army,Navy,Marine Corps
178、,and Air Force.In fact,the Air Force has already made great strides in developing their own communications gateway,called the Advanced Battle Management System(ABMS),which will be integrated into JADC2.Figure 19.JADC2:Sensing Source:Citi Research Make Sense The second stage,“Make Sense,”focuses on t
179、he collection and interpretation of the multi-sourced data,primarily using AI.While the specific measurements and analysis conducted by the AI unit will vary,it is not difficult to understand how AI entities operate given our already normalized predisposition toward them,such as Apples Siri,Amazons
180、Alexa,and now OpenAIs ChatGPT.The goal of using AI is to accelerate a commanders decision-making time.This can be done by assessing the threat levels of unannounced attacks,determining the location and defenses of enemy leaders and/or hostages,and even providing potential solutions and accounting fo
181、r their potentially positive or negative ramifications.Furthermore,this analysis will not be verbally communicated,so there is less risk of data interception.Overall,this process,which would ordinarily take days or weeks,can now in theory be reduced to a matter of minutes,allowing the military to ac
182、t and neutralize threats before they grow out of control.Moreover,global conflicts can potentially be avoided,as the U.S.government has expressed interest in promoting JADC2 to deter enemies from endangering others given the now much-quicker potential U.S.response time.Citi GPS:Citi GPS:Global Persp
183、ectives&Solutions May 2024 2024 Citigroup 30 Figure 20.JADC2:Making Sense Source:Citi Research Act The final stage is“Act,”which involves carrying out the course of action the commander chooses with the best available assets,no matter the branch of the military.The necessary orders will be sent out
184、via the now-unified communication gateways to the responsible branches and carried out as planned.The length of time between receiving these instructions and executing them fully will depend on the mission,but transmission of the orders will be faster and more secure than by conventional means.Anoth
185、er goal is preserving the already existing protocols for carrying out orders.The current“Mission Command approach”allows subordinates to operate efficiently by being aware of their supervisors intent for each course of action,even when lines of communication are broken.This stage completes the cycle
186、 and brings any confrontation that arises around the globe to a quick conclusion.May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 31 Figure 21.JADC2:Acting Source:Citi GPS,Citi Research Barriers to Adoption In our view,there are three barriers to the immediate and sustainable
187、adoption of a JADC2 approach to warfighting:inertial,technical,and ethical.Budget constraints are real in the U.S.,particularly with a divided government.There is therefore risk that a“good enough”approach could be taken to the implementation of JADC2.For example,legacy sensors and communications ne
188、tworks might work against non-nation state actors and could save money,but they might prove vulnerable to the cyber capabilities of near peers.It will be up to Congress to assess the risks associated with that choice.There are also technical hurdles to be resolved,particularly in the areas of secure
189、 and resilient communications networks and the design and implementation of accurate AI models.Further,since AI is poised to play a significant role not only in gathering and inferencing data,but also in providing potential solutions,ethical concerns are likely to dominate the headlines in the years
190、 ahead.Are the data supplied to the AI machines accurate?Are the AI algorithms accurate?Should a machine be given the authority to provide advice/solutions in situations where human life is at stake?Market Dynamics We expect investments in military modernization by the U.S.and its allies to grow aro
191、und 5%annually through 2030 to support the strategic and defense doctrines of these countries which emphasize deterring near-peer conflict.Spending is likely to focus on recapitalizing nuclear assets to assure future deterrence and on bolstering the capabilities needed to support the JADC2 construct
192、.For example,budgets for space-based assets and operations have more than tripled in the U.S.over the past seven years,in large part driven by the need for a resilient network of sensors and communications capabilities to implement JADC2 effectively.Further,spending on intelligence-gathering and ana
193、lytical systems(C4I,or command,control,communications,computers,and intelligence)has more than doubled over that same time.Importantly,it is not just traditional defense contractors that have benefited from market expansion.Hundreds of companies have been started over the past decade that focus on p
194、roviding sensing,communications,and analytical Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 32 capabilities across all domains to support the warfighter and the JADC2 initiative,as barriers to entry are lower in these areas than in more traditional military systems.Many of
195、 these firms have reached critical scale,while others have become acquisition targets.Going forward,we expect the U.S.to continue to focus its spending growth in the areas in and around JADC2,given the benefits that a connected battle space with superior situational awareness affords the countrys tr
196、oops.This points to some level of market disruption as non-traditional defense companies take a greater share of the overall spending pie.Figure 22.DoD Space-Related Budgets Figure 23.DoD C4ISR-Related Budgets C4ISR=Command,Control,Communications,Computers and Intelligence Surveillance and Reconnais
197、sance Source:Citi Research,Department of Defense,OMB Source:Citi Research,Department of Defense 11.19.910.28.0 8.07.2 7.1 7.19.89.311.915.516.721.726.30($bn)10.511.110.98.27.06.67.4 7.48.610.010.211.912.712.814.50246810121416($bn)May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 20
198、24 Citigroup 33 Neuromorphic Computing Architecture Until now,computing architecture has generally adopted one of two types:von Neumann or Harvard structure.The Von Neumann structure is the first computer method with a built-in program,and it can perform different calculations by merely replacing th
199、e software without having to rearrange wires in hardware.The Harvard architecture divides the memory into a place where instructions are stored and a place where data is stored,which is a slight modification to the Von Neumann architecture to solve the bottleneck problem.However,given the continued
200、increase in data bottlenecks between logic and memory,we expect the current architecture is becoming unsuitable to meet computing demand growth,especially in light of rising artificial intelligence(AI)-related demand structure.As such,we expect future computing architecture and hardware to initially
201、 develop in the direction of relieving the bottleneck issue with the current von Neumann structure.Eventually,we think it will take on a more human brain-like architecture that is optimized to meet rising AI-related computing demand.Figure 24.Computing Architectures Direction:Von Neumann to Parallel
202、 to Neuromorphic Source:Citi Research We expect the market change will occur in the order of:(1)integration of logic and memory;(2)neural-based parallel computing NPU(Neural Processing Unit);and(3)neuromorphic computing architecture.Neuromorphic computing,which mimics the human brain structure,follo
203、ws a completely different paradigm from todays traditional von Neumann architecture task processing.While current computing systems with the von Neumann architecture transmit and modify precise numerical data,the human brain transmits and processes data through a series of stimulations called spikes
204、.Neurons receive these spikes through synapses and make small changes in the cell membrane.Neurons integrate these potential changes over time.When many spikes arrive in a short amount of time,the neuron then outputs a spike.Neurons,which perform calculations in the human brain,correspond to logic c
205、hips in a computer,while synapses(the connections between neurons)would correspond to buffer memories such as static random-access memory(SRAM)and dynamic random-access memory(DRAM)in a computer.As such,if several billions of logic chips and several tens of trillions of SRAM/DRAM chips are connected
206、 in parallel,the theory is that the human brain structure can be artificially reproduced.Peter Lee Asia Pac Semiconductors&Components Analyst Citi Research Von Neumann Architecture AI Computing Architecture Neuromorphic computing architecture mimics the human brain Citi GPS:Citi GPS:Global Perspecti
207、ves&Solutions May 2024 2024 Citigroup 34 Figure 25.Mimicking Synapses with SRAM Source:Google Search,Citi Research We believe computing architecture will eventually resemble the human brain structure and expect the first step to be through increased demand for advanced packaging.The backend technolo
208、gys importance should increase to speed up data transfer between heterogeneous chips.In the memory space,we expect AI computing to generate increased demand for HBM3(the latest High Bandwidth Memory)and DDR5(the latest DRAM)memory.In terms of timeline,logic and memory integration and neural computin
209、g adoption have already begun,whereas neuromorphic computing is expected to be adopted starting in 2027E.Neuromorphic computing is not well-known to the market due to technology difficulty.Most of the neuromorphic semiconductors developed to date have been developed with the conventional silicon-bas
210、ed complimentary metal-oxide semiconductor(CMOS)transistor technology.If we can divide neuromorphic computing into“generations”depending on how it operates,the operation of first-generation neuromorphic semiconductors is based on reading and writing of weighted synapses between the CPU and memory ch
211、ips.However,the second-generation neuromorphic semiconductors integrate logic and memory chips through a“memristor,”which has characteristics of both memory and peripheral resistors at the same time.“Memristor”is a compound word of memory and resistor,and in a memristor,having a gradual switching re
212、sistance is crucial to handling subdivided weights.Second-generation neuromorphic semiconductors vary depending on the material and implementation method of the device,but memristor is currently the most studied path.One of the latest technologies currently being pursued is an AI accelerator,which i
213、s a hardware or microchip specially designed for fast processing of AI algorithms.Like other accelerators,AI accelerators are designed to efficiently perform specific AI-related tasks that are inefficient with a typical x86-based CPU.Purpose-built accelerators provide higher performance,more feature
214、s,and higher power efficiency when completing a specific task.A technology key to this trend would be memory-based Processing in Memory(PIM),which corresponds to the concept of Near Memory.Neuromorphic computing is expected to be adopted from 2026 Neuromorphic computing is not well known to the mark
215、et May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 35 Figure 26.Memristor with ReRAM Source:Google Search,Citi Research As mentioned,we expect the first step towards this new architecture will be through increased demand for advanced packaging for the integration of logic chi
216、ps.We foresee backend technologys importance will increase in the future to increase data transfer speed between heterogeneous chips.In the memory space,we project Near Memory will emerge as an important direction and expect AI computing will generate increased demand for HBM3 and DDR5.In addition,w
217、e think integration of memory and logic chips through PIM will increase going forward.Theoretically,1,000 to 10,000 synapse(DRAM)is needed per neuron(CPU/GPU),which indicates that the DRAM demand could increase radically with the adoption of neuromorphic computing.It is difficult for neuromorphic co
218、mputing to fully implement the human brain structure as it is currently difficult to implement artificial connections of billions of neurons and synapse like human brain.Therefore,while we expect neuromorphic computing architecture to follow the human brain structure,and to be implemented in a simpl
219、ified brain structure in the early stage.The human brain consists of 85 billion neurons and 85 trillion to 850 trillion synapses.In other words,the number of synapses per neuron is about 1,000 to 10,000 times the number of neurons.Human neurons correspond to the logic part of a computer,such as CPUs
220、,and human synapses correspond to the memory part,such as DRAMs.Meanwhile,NAND in a semiconductor plays the same role as the hippocampus in a human brain.In the human brain,a large portion of computational tasks are handled by the frontal lobe,where neurons and synapses are organically connected to
221、process parallel computation,thereby enabling quick computation and transfer of data.However,in the current von Neumann computing structure,logic and DRAM are separated,resulting in a data bottleneck and thereby lowering performance compared to the human brain.How big could the opportunity be?The ba
222、rriers to adoption:difficult implementation due to complexity Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 36 Figure 27.Human Brain Source:Google Search,Citi Research Neurons and synapses handle computations in the human brain.Calculations that are processed by neurons are
223、 temporarily stored in synapses,similar to how computation tasks processed by the CPU in a computer are temporarily stored in a buffer memory DRAM.However,as human brains can simultaneously handle computation and data transfer(unlike computers that are structured in the von Neumann architecture),hum
224、an brains can complete learning and inference tasks more efficiently.Figure 28.Brain:Neuron and Synapse Source:Google Search,Citi Research Notable features of the human brain structure include:(1)parallel computation to minimize data bottlenecks;and(2)real-time communication through neurons(which pl
225、ay the role of logic in a computer)and synapses(which play the role of DRAM in a computer).We predict computing architecture will develop in a way that increasingly resembles the human brain more to alleviate data bottleneck burdens.With the wider commercialization of artificial intelligence,we beli
226、eve semiconductor chips will evolve towards the direction of merging logic and memory functions,similar to the way human brain functions.Winners and losers May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 37 Piezoelectric Roads:The Next Smart Road Rising energy demand is fast
227、outpacing the rate at which we can renew conventional forms of energy,both for practical and emissions-related reasons.As alternative forms of energy generation become increasingly vital,piezoelectric roads could be a next big innovation.Figure 29.World Renewable Electricity Generation as a%of Total
228、 Source:Citi Research,energyinst.org Piezoelectricity refers to the generation of electricity by subjecting a material to mechanical stress.The pilot versions of the technology included application in various forms including barbeque lighters and dance floors.In 2008,the first large-scale piezoelect
229、ric implementation was made by the East Japan Railway Company in the Tokyo station;this involved the generation of electricity from passengers footsteps to power ticket machines.Currently,around the globe,research and development(R&D)is ongoing to commercialize piezoelectric technology for wider app
230、lication on roads,especially in cities with heavy traffic.Piezoelectricity generation is similar in concept to wind energy,where electricity is generated by converting mechanical power from wind turbines.The concept of piezoelectric roads arises from harnessing the potential generation of electricit
231、y from vehicular movements.This involves the conversion of mechanical energy from vehicular movement into electricity.With the amount of available car park and miles driven data constantly increasing,there is ample scope for tapping this source of energy.With traffic increasing around the globe,the
232、concept of harvesting electricity through the movement of vehicles is certainly worth considering.0%5%10%15%20%062200420062008200022Avinash Mundhra Business&Professional Services Citi Research Marc Vant Sant Commercial&Professional Services Citi
233、 Research Arthur Truslove Commercial&Professional Services Citi Research Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 38 Figure 30.Renewable Energy:Various Forms Source:Citi Research Past Projects and Studies Figure 31.Benefits of Piezoelectric Roads Source:Citi Research R
234、&D for this technology is in progress in a few countries,including various pilot projects and experimental installations.New materials and designs are being explored to improve the performance and cost-efficiency.In 2009,Israels Innowattech launched an experiment in which it established the worlds f
235、irst piezoelectric road:a 1-kilometer(km)stretch of piezo road on a highway in northern Israel.The company claimed that for a single-lane,1 km-long piezoelectric highway(PEH),it was possible to generate as much as 100 kilowatts Limited Conventional ResourcesUtilization of Otherwise Lost Mechanical E
236、nergyBenefitsNew Form ofRenewableEnergyLow Carbon EmissionsMay 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 39(kW)of electricity per hour.However,neither detailed information regarding project specifications nor experimental raw data were made available by the company.A recent
237、 study24 on piezoelectric roads,prepared for the California Energy Commission by authors from the University of California,Merced Department of Mechanical Engineering,concluded that one lane of a one-mile-long roadway could potentially generate 72,800 kilowatt-hour(kWh)of energy every year based on
238、mid-sized vehicles.This could go up to 907,873 kWh for heavy trucks,which the report claimed implied a reduction of 300 metric tons of CO2.The project is part of Californias goal of generating 100%of its electricity from renewable and zero-carbon energy sources by 2045.In 2021,in another study publi
239、shed by International Journal of Creative Research Thoughts(IJCRT),it was claimed that one lane of one-mile-long roadway could potentially generate around 70,800 kWh of energy every year.25 However,no details were given regarding the size of vehicles assumed.Process To create a piezoelectric road,st
240、rips or tiles of piezoelectric materials,mostly Lead Zirconate Titanate placed between metal plates,are embedded within a roads surface.These materials can come in various forms(eg,pads or sensors)and are strategically positioned to capture the mechanical energy produced by vehicles passing over the
241、m.The moving vehicles put vertical force and apply pressure on the piezoelectric materials,generating electricity.Figure 32.Piezoelectric Mechanism Source:Citi Research Consumption Possibilities The energy generated from piezoelectric roads can be consumed or stored in various forms.24 Jian-Qiao Sun
242、,Tian-Bing Xu,and Atousa Yazdani,Ultra-High Power Density Roadway Piezoelectric Energy Harvesting System,California Energy Commission,June 2023.25 Pravin Wale et al.,“Generation of Electricity from Roads by Using Piezoelectric Sensors,”International Journal of Creative Research Thoughts,Vol.9,No.1,J
243、une 2021.Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 40 Figure 33.Consumption and Storage Possibilities Source:Citi Research EV charging machines:As EV penetration increases,more EV charging stations will likely be set up around highways;these stations could source their
244、energy from piezoelectric power generation.Streetlights:Piezoelectric roads could be linked up directly to power streetlights.This could be useful on highways where the power grid is set up just to light roadside lampposts.Traffic lights:Piezoelectric roads could produce energy to power traffic ligh
245、ts in urban areas.Storage:Unconsumed piezoelectricity could be stored in the grid for household and commercial consumption,as well as in battery form.Comparison to Solar and Wind Energy Two comparable low-carbon energy sources to piezoelectricity are wind energy and solar energy.We compare the three
246、 energy sources in the table below.Figure 34.Comparison vs.Solar and Wind Energy Source:Citi GPS,Citi Research Bottlenecks Limited research is available on the feasibility and sustainability of piezoelectric roads,as they are still in an experimental stage and not yet implemented on a large scale.In
247、itial investment costs remain an area of concern around the deployment of piezoelectric materials.Unanswered questions remain regarding the longevity of the materials,as the technology is still evolving.To measure the potential lifetime of a system,more extensive fatigue tests are needed.Electricity
248、 GenerationEV Charging StationsStreetlightsTraffic LightsPower Grids/BatteriesPiezoelectric RoadsSolar EnergyWind EnergySource of ElectricityVehicle MovementsSunWindWeather DependencyNot DependentHighHighCarbon EmissionsLow Low Low Relative Space RequirementLow(set up on already-built roads)Medium(m
249、ostly built on roofs)HighUrban Deployment OpportunityMedium-to-HighHighLow AdoptionLowHighHighMay 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 41 Future Potential Piezoelectric road technology is still at an early stage,but with focus rising on low-emission renewable energy so
250、urces,piezoelectric penetration could increase significantly,as we have seen for solar and wind energy(Figure 35 and Figure 36)over the past decade.With R&D,the technology is being developed on a bigger scale for roads,especially within the cities with heavy vehicular movement.Piezoelectric roads co
251、uld be a radical development,as they use mechanical energy that is otherwise wasted,as well as existing infrastructure.Ongoing research on feasibility,efficiency,sustainability,and cost-effectiveness will be pivotal for achieving widespread adoption.Figure 35.Solar Capacity 1967-2022(TWh)Figure 36.W
252、ind Capacity 1967-2022(TWh)Source:Citi Research Source:Citi Research Implementation Potential and Cost Analysis Based on the California Energy Commission study discussed earlier,if the U.S.decides to convert only 5%of the current road infrastructure(4.19 million miles)into piezoelectric roads,this c
253、ould generate around 50 billion watt-hours of renewable energy,which is equivalent to 5.6%of 2022 renewable electricity generation in the U.S.and around 1.2%of total U.S.electricity generation.This would be enough to power 5,000 households for one year,based on average 2021 consumption of around 10,
254、600 kWh/household/year(source:EIA).Figure 37.Scenario Analysis Based on Various Levels of U.S.Implementation of Current Infrastructure U.S.Implementation 5%10%15%20%KWh per year/Mile(80%Mid-sized;20%Heavy vehicles)239,815 239,815 239,815 239,815 Total U.S.lane miles 4,190,000 4,190,000 4,190,000 4,1
255、90,000 Total miles based on 20%implementation 209,500 419,000 628,500 838,000 Estimated electricity generated/year(BWh)50 100 151 201 Total Electricity generated,2022 in BWh 4,231 4,231 4,231 4,231 Piezo as%of Total Electricity 1.20%2.40%3.60%4.70%Renewable electricity generated,2022 in BWh 901 901
256、901 901 Piezo as%of Total Electricity 5.60%11.20%16.70%22.30%U.S.energy-related CO2 emissions,2022(million metric tons)4,964 4,964 4,964 4,964 Estimated CO2 reduction(million metric tons)63 126 189 251 Piezo-led CO2 Reduction 1.30%2.50%3.80%5.10%Source:Energy Information Administration(EIA),American
257、 Road&Transportation Builders Association(ARTBA),Citi Research 02004006008001,0001,2001,400727201220172022N AmericaS&C AmerciaEurope&CISMEAAPAC05001,0001,5002,0002,500727201220172022N AmericaS&C AmerciaEurope&CISMEAAPAC Citi GPS:Citi
258、GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 42 Cost Analysis Initial investment costs remain an area of concern around the deployment of piezoelectric materials.Although the exact cost dynamics are still unknown,a 2013 study prepared for the California Energy Commission suggested a lev
259、elized cost of energy(LCOE)in the range of$0.08-$0.20/kWh.26 Figure 38.LCOE of Renewable Energy Sources in 2022 vs.2010 Total Installed Costs Capacity Factor Levelized Cost of Electricity (2022$/kW)(%)(2022$/kW)2010 2022%change 2010 2022%change 2010 2022%change Solar PV 5,124 876-83%14 17 25%0.445 0
260、.049-89%Onshore Wind 2,179 1,274-42%27 37 37%0.107 0.033-69%Offshore Wind 5,217 3,461-34%38 42 11%0.197 0.081-59%Source:Citi Research,IRENA.org The dollar cost per Watt for solar energy was down around 90%in 2022 versus 2010.We do not expect a similar reduction in cost for piezoelectric technology,b
261、ut there will be cost improvements helped by economies of scale if this technology is adopted at a large scale.Parallel Technology Piezoelectric road technology could be seen as a potential upgrade to the solar road technology that has already been adopted in various parts of the world,including the
262、 U.S.,France,the Netherlands,Japan,and China.These solar roads are embedded with energy-harvesting modules that can power streetlights and melt snow.However,they are heavily weather-dependent,and the road infrastructure does not make for a smooth driving experience,as solar roads lack strong tire gr
263、ips and demand high maintenance costs.Conclusion In summary,piezoelectric road technology is still in the pilot stage.However,it does provide an attractive potential option for sustainable energy generation.Piezoelectric roads could be an important addition to existing forms of renewable energy,like
264、 wind and solar,especially since wind and solar energy require wind and sun,respectively,and are thus largely weather-dependent.Piezoelectric roads could help harness the energy already applied to roads on a large scale.26 Davion Hill,Arun Agarwal,and Nellie Tong,Assessment of Piezoelectric Material
265、s for Roadway Energy Harvesting:Cost of Energy and Demonstration Roadmap,DNV KEMA Energy&Sustainability,January 2014.May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 43 Quantum Sensing Data is increasingly integral to the global economy.Sensors the eyes and ears of our technol
266、ogical world collect the data that enable some of societys most critical systems.As we push the boundaries of what is possible in fields such as precision manufacturing,conventional sensors are being challenged by the limits of classical physics.In recent years,a new type of advanced sensor technolo
267、gy has been emerging next-generation quantum sensors.Quantum sensors use the principles of quantum physics(ie,the physics of low energy or small-scale systems,where energy exists in discrete packets called“quanta”)to make measurements at the level of atoms or photons.They have the potential to be ex
268、tremely sensitive to their environment,detecting the miniscule changes in physical quantities that would be imperceptible to conventional sensors.The ability to probe the physical world with an unprecedented level of detail,and the new insights this is expected to bring,will generate a new pool of d
269、ata to help power decision-making.As such,quantum sensors have the potential to bring benefits to society from areas as broad as navigation to healthcare,defense,and even agriculture(see our Citi CGI report Quantum Sensing:Techs New Eyes and Ears).The challenge with understanding quantum sensors is
270、that there are many different types,all at different stages of technological maturity and commercialization,as seen in Figure 40.Some quantum sensors measure time,acceleration,or rotation,whereas others measure the likes of electric fields,magnetism,or gravity.And not all quantum sensors work in the
271、 same way.Figure 39.Potential Impact of Quantum Sensors vs Technological Maturity Source:Quantum Economic Development Consortium(QED-C),“Quantum Sensing Use Cases:Prospects and Priorities for Emerging Quantum Sensors,”September 2022.Quantum sensing,therefore,is really an umbrella term for all the di
272、fferent types of quantum sensors.It is also one of the three main key types of quantum technologies alongside quantum computing(see our Citi GPS report Quantum Computing:Moving Quickly From Theory to Reality)and quantum communications.While there are numerous types of quantum sensors,we focus on fou
273、r examples that we believe have the most near-term potential for disruption.Tahmid Quddus Islam Citi Global Insights Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 44 Atomic Clocks Atomic clocks measure time using the resonance frequencies of atoms and have been used commerc
274、ially for decades.They underpin much of our infrastructure,including telecommunications,and have an estimated market size of over$500 million.27 Today,the best conventional cesium-based atomic clocks are accurate to around 0.03 nanoseconds per day,equating to an error of approximately 1 second per 1
275、00 million years.28 The next generation of atomic clocks,optical atomic clocks,have been reported to improve on this 100-fold in laboratory experiments,being accurate to around 1 second per 30 billion years twice the age of the universe.Figure 40.An Optical Atomic Clock Source:National Physical Labo
276、ratory(NPL)Conventional atomic clocks are already used in numerous applications,such as those listed below.The increased precision that optical atomic clocks offer is expected to further help test theories of fundamental physics and could lead to the redefining of the definition of a second.29 Some
277、practical areas they are expected to help in include:Synchronizing High-Speed Networks:Any data being sent over a network is entirely reliant on the precise timing of data packets,without which errors can occur or communication lines can become congested.This is why the International Telecommunicati
278、on Union(ITU)places limits on the difference in speed between two networks to around 1 second per 3,000 years an accuracy and stability only achievable using atomic clocks.30 It is thought that the next generation of ultra-stable,highly accurate optical atomic clocks could help improve the synchroni
279、zation of high-speed networks.31 High-Frequency Trading:The use of atomic clocks to provide extremely accurate timekeeping to ensure high-frequency trading(HFT)gaps are 27 Future Market Insights,“Atomic Clock Market:Report Preview,”August 2023.28 NIST,“Timekeeping and Clocks FAQs,”accessed December
280、13,2023.29 Nathaniel Sherrill et al.,“Analysis of Atomic-Clock Data to Constrain Variations of Fundamental Constants,”New Journal of Physics,September 6,2023;Jeremy Hsu,“Optical Atomic Clocks Are Ready to Redefine Time,”IEEE Spectrum,May 27,2020.30 Thales Group,“Atomic Clocks and the Importance of B
281、eing on Time,”November 18,2014.31 UK National Physical Laboratory(NPL),“Optical Atomic Clocks,”accessed December 13,2023.May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 45 addressed has been discussed for some time now.32 The steady growth of HFT since the 2008 Global Financi
282、al Crisis has meant the accurate timestamping of trades has become of increasing importance.In 2008,the Financial Industry Regulatory Authority(FINRA)required stock market trading accuracy to 1 second,but by 2016,the U.S.Security and Exchange Commission(SEC)approved a tighter standard of 50 millisec
283、onds for certain activities.Hedge funds have also been reported to be looking at using atomic clocks to identify novel ways for“executing synchronized trades in multiple exchanges.”33 Global Positioning System(GPS)Accuracy:GPS operates on signals received from satellites at the speed of light(300,00
284、0,000 meters per second),meaning that even a small error in timing of just 1 microsecond(a millionth of a second)can result in positioning errors of around 300 meters.The ability of optical atomic clocks to be accurate to picoseconds(trillionths of a second)could enable significant improvement in th
285、e location accuracy and autonomy of GPS.Quantum Inertial Sensors Global navigation satellite systems(GNSSs),such as GPS,underpin many of our daily activities,from determining the best route to work to ensuring that goods are delivered all around the country.The GPS market size is estimated to have s
286、urpassed$100 billion in 2023,but systems are very vulnerable to jamming,blocking,or spoofing.34 One report put the potential loss to the UK economy alone from a GNSS outage at over 1 billion($1.2 billion)per day,with two-thirds of the impact affecting critical infrastructure such as emergency servic
287、es and roads meaning that such an outage is also likely to cost lives.Figure 41.Stability of Quantum vs Classical Accelerometers and Gyroscopes Source:Glasgow University As with any type of GNSS,GPS is not able to be used in locations that do not have access to signals from GPS satellites,such as be
288、low ground or under water.In GNSS-denied environments,inertial sensors,such as accelerometers and 32 Jacob Aron,“Atomic Time Lord to Battle Sneaky High-Speed Trades,”New Scientist,April 16,2014.33 Miles Weiss and Zachary Mider,“Legendary Hedge Fund Wants to Use Atomic Clocks to Beat High-Speed Trade
289、rs,”Bloomberg,July 7,2016.34 Grand View Research,“Global Positioning Systems Market Trends:Report Summary,”November 2023.Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 46 gyroscopes,can be used in navigation,measuring acceleration and rotation that is then converted into a l
290、ocation.The challenge with using any type of inertial sensor for navigation is that their accuracy eventually degrades,a phenomenon known as“bias drift.”This is where errors(or“biases”)accumulate over time,ultimately making the sensors less stable and unreliable for long-distance travel.Quantum iner
291、tial sensors use atoms to measure acceleration and rotation,and in the case of accelerometers,have been shown to provide a 50-fold improvement in stability over their classical equivalents.35 Unlike atomic clocks,most quantum inertial sensors for navigation are still in the early field-testing stage
292、.However,a number of practical use cases are being investigated:Below Ground:A grant has been awarded in the UK to investigate the use of quantum sensing on the London Underground train network,45%of which resides below ground.Quantum inertial sensors may be able to help trains register their positi
293、on on the network more accurately,thus offering greater reliability and a safer experience for passengers.36 Maritime:The UKs Royal Navy has been testing quantum inertial sensors for navigation on one of its research vessels.37 Maritime travel is prone to having areas of poor GNSS connection.A signi
294、ficant proportion(around 20%)of the estimated 1 billion/day loss to the UK economy from GNSS failure is expected to come from the maritime sector something that quantum sensors could help mitigate.38 Air:Following the U.S.Executive Order“Strengthening National Resilience Through Responsible Use of P
295、ositioning,Navigation,and Timing PNT Services,”the U.S.Department of Transportation(U.S.DOT)is investigating alternative navigation methods.39 In late 2023,the U.S.DOT initiated a Request for Information(RFI)for“technology capable of providing critical infrastructure users and operators positioning
296、and/or timing information that is derived independently from Global Navigation Satellite Systems(GNSS).40 Quantum inertial sensors are thought by many to be a possible solution.Quantum Magnetometers Sensors that detect magnetic fields(or“magnetometers”)are a cornerstone of diagnosing health conditio
297、ns.Furthermore,quantum sensors that detect magnetism,such as Magnetic Resonance Imaging(MRI)technology,have been heralded as a revolution ever since the first patient scan in the 1970s.41 Similarly,35 Simon Templier et al.,“Tracking the Vector Acceleration with a Hybrid Quantum Accelerometer Triad,”
298、Science Advances,Vol.8,No.45,November 9,2022.36 UK Engineering and Physical Sciences Research Council,“Quantum Sensing on the London Underground,”April 27,2023.37 UK Royal Institution of Naval Architects,“Research Ship Enables Royal Navy to Test Cutting-Edge Navigation System and New Radars,”July 7,
299、2023.38 London Economics,The Economic Impact on the UK of a Disruption to GNSS,August 2023.39 SAM.gov,“RFI-Complementary Positioning,Navigation,and Timing(PNT),”accessed December 13,2023.40 Billy Mitchell,“Transportation Department Seeks GPS Alternatives to Fortify USs Position,Navigation,and Timing
300、 System,”Fedscoop,September 25,2023.41 American Physical Society,“This Month in Physics History:July 1977:MRI Uses Fundamental Physics for Clinical Diagnosis,”July 2006.May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 47 brain scans that use a process known as magnetoencephalo
301、graphy(MEG)are able to measure the magnetic fields generated by electrical signals in the brain.42 The MEG market size is estimated to be over$270 million and currently uses a type of quantum magnetometer known as a Superconducting Quantum Interference Device(SQUID).43 Figure 42.SQUID-MEG vs.OPM-MEG
302、 Source:“Magnetoencephalography with optically pumped magnetometers(OPM-MEG)”SQUIDs need to be cooled to near“absolute zero”(around 273.15C),which requires cryogenic cooling.This results in brain scanners being bulky and expensive to maintain.However,a new type of quantum magnetometer,known as an Op
303、tically Pumped Magnetometer(OPM),has recently seen considerable progress in its development.OPMs get their names from the fact that they use lasers to“pump”atoms into a specific state.These do not need to be supercooled and consequently can be made much more compact,resulting in wearable brain scann
304、ers.Whilst its important to note that there are numerous potential applications of this technology in various industries,in the examples below,we focus on healthcare applications:Epilepsy Monitoring:OPMs could potentially be used to enable the high-fidelity monitoring of epilepsy without surgery(doc
305、tors currently make assessments by removing part of the skull to attach electrodes directly to the brain).44 Furthermore,in instances where surgery is required,there is notable investment being made into the use of OPM-MEG for pre-surgical planning.45 42 Athinoula A.Martinos Center for Biomedical Im
306、aging,“A History of fMRI,”accessed December 14,2023.43 Grand View Research,“Magnetoencephalography Market Size:Report Summary,”accessed December 14,2023.44 UK National Quantum Technologies Programme,“Quantum Brain Scanner,”PDF,October 2021.45 Wellcome Centre for Human Neuroimaging,“MEG Team Awarded
307、Funding to Enhance Technology Aiming to Improve Accuracy of Pre-Surgical Planning for Epilepsy,”accessed December 14,2023.Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 48 Alzheimers Diagnosis:The latest OPM-MEG sensors can be put in close proximity to the head,providing the
308、 additional advantage of enabling more accurate 3D scans.Such scans could provide a way of identifying neurological conditions.Many neurological conditions are characterized by the slowing down of messages in the brain.By monitoring real-time changes,OPM-MEGs have the potential to assess the pace at
309、 which neural signals travel across the brain.A decline in signal speed could indicate the presence of conditions such as Alzheimers or other brain-related diseases.46 Autism Research:A hospital in Toronto is investigating the use of OPM-MEG technology to scan children identified as having a higher
310、likelihood of developing autism.47 The trial involves the regular scanning of the childrens brains starting at 12 months of age to track their brain function development and compare it to that of children who develop autism.The compact helmet design being used by researchers allow scans of children
311、that would otherwise not be possible,as the inability of children to sit still makes using traditional SQUIDs impractical.Quantum Gravimeters Sensors that measure gravity(or“gravimeters”)typically use classical methods such as measuring a spring with a mass attached to it or the free-fall of a mass
312、in a vacuum.Quantum gravimeters,on the other hand,use a process known as atom interferometry,which exploits the wave-like nature of atoms and their interference patterns effectively measuring the pull of gravity on individual atoms.Figure 43.Resolution of Quantum Gravitational Sensors Source:“Quantu
313、m sensing for gravity cartography”Paper Quantum gravimeters offer numerous benefits,such as the potential to be more stable over time,as well as the opportunity to remove the noise arising from ground vibrations.For instance,by using two quantum gravimeters set-up as a gradiometer(which measures the
314、 gradient of gravitational changes),vibrations can be identified and removed this promises to reduce measurement times from several minutes to just a few seconds.As it currently stands,quantum gravimeters can achieve a level of precision not too dissimilar to the classical gravimeters used in indust
315、ry.However,46 Medical Design Briefs,“Quantum Brain Sensors Could Spot Dementia,”January 1,2022.47 UK Quantum Technology Hub:Sensors and Timing,“Wearable Brain Imaging System Installed in Toronto for Autism Research,”August 24,2021.May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigro
316、up 49 the ability for quantum gravimeters to mitigate the noise from ground vibrations means that the future improvements in the sensitivity of these devices could translate directly into either higher spatial resolution or faster reading times.Consequently,it has been suggested that there could yet
317、 be a 10 x to 100 x improvement in instrument sensitivity that could be deployed in the field.48 Historically,the accuracy and physical size of quantum gravimeters have restricted them to laboratory settings.However,recent improvements have resulted in them being used in the field for the first time
318、,and it is thought that quantum gravimeters may be especially valuable in applications where detecting minute details can make a significant difference,such as:Civil Engineering:Described as potentially“Google Maps for the Underground”,the use of quantum gravimeters could help save time and money by
319、 more accurately scanning underground infrastructure or detecting hazards such as sinkholes.For example,by one estimate,16%of damage to the UKs utility infrastructure caused by contractors is thought to be due to a lack of awareness of the existing pipes underground,with the cost of this damage bein
320、g estimated to be up to 5.5 billion($6.8 billion).A collaborative project between industry players and academics,called“Quantum Technology Potential for Rail Infrastructure”(QT PRI),is exploring the use of quantum sensors to identify underground assets.The collaborators believe there are around 190,
321、000 different assets underground that quantum sensors could help identify.Energy&Mineral Exploration:Gravity surveys(that measure local gravitational fields at locations of interest)are regularly performed in the energy sector to map structures in the search for new energy reserves.Quantum gravimete
322、rs have recently been tested on a ship at sea as a new way of mapping the ocean floor.49 This technique could be used to help navigation,and companies like BP have already started hosting workshops on the use of quantum sensors and to train their employees on the technology.50 Environmental Monitori
323、ng:Another potential use case for quantum gravimeters is improving earthquake detection.Once an earthquake occurs,it is possible to use quantum gravimeters to detect immediate gravitational changes resulting from mass shifts in the earth,even before seismic waves are felt.A gravity-based alert might
324、 only offer a few extra seconds,but that time can be crucial in saving lives.Conclusion In conclusion,the potential use cases for quantum sensors are vast,and the derivative economic impact could be hugely transformative for countless industries.The proprietary analysis in our Quantum Sensing:Techs
325、New Eyes and Ears report suggests most underestimate the potential of the quantum sensing market.For instance,given navigation is critical for commercial and military aircraft,there could potentially be up to a market of$3.25-5bn for just one type of quantum sensor,quantum inertial sensors,in just t
326、he aviation industry alone.48 Nature,“Quantum sensing for gravity cartography,”February 23,2022 https:/ 49 UK Quantum Technology Hub:Sensors and Timing,“Quantum Sensor for Gravity Gradiometry Validated at Sea,”September 18,2023.50 UK Quantum Technology Hub:Sensors and Timing,“Exploring Quantum for t
327、he Oil and Gas Industry,”May 22,2018.Citi GPS:Citi GPS:Global Perspectives&Solutions May 2024 2024 Citigroup 50 Retail Media A Fast-Growing Digital Ad Format Benefitting Both Advertisers and Retailers/Marketplaces Retail media is a digital advertising format tied either to a retailers website or to
328、its products on a third-party website.The advertising format leverages a retailer or brands first-party data to target consumers within their shopping journey and utilizes closed-loop measurement for attribution of that sale(directly tying a sale to the ad).This advertising model is leading to both
329、revenue and profitability growth across multiple companies and sectors.Retail media has propelled by a confluence of factors the growth of e-commerce;the shifting privacy landscape;and better data collection,targeting,and measurement of ads to become one of the fastest-growing verticals within digit
330、al advertising.Retailers are looking to improve monetization,and advertisers are drawn to a model that targets shoppers on their purchase journey.As stricter data privacy standards have made third-party(3P)data harder to use for targeted advertising,retailers and advertisers,are increasingly focusin
331、g on this growing but still nascent ad format.51 Figure 44.Retail Media Networks Closed-Loop Measurement Capabilities Are Critical Factors of Adoption for Advertisers Source:Citi Research,Quotient 51 One relevant data privacy initiative is Apple enabling users to block the identifier for advertisers
332、(IDFA)which facilitates third-party tracking as part of its App Tracking Transparency initiative.Cookies are also being deprecated on many web browsers,including on Google Chrome beginning in 2024.Thomas A Singlehurst,CFA Head of EMEA EMT Sector Citi Research Ygal Arounian U.S.Internet Analyst Citi
333、Research Maxwell Moore U.S Internet Research Team Citi Research May 2024 Citi GPS:Citi GPS:Global Perspectives&Solutions 2024 Citigroup 51 A Large,Fast-Growing Market We estimate that retail media is currently a$65 billion market globally(excluding China)and expect it to grow to$110 billion by 2027.That represents around 12%of total digital advertising dollars today(excluding China)and an estimate