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Morningstar has launched an index tracking late-stage pure-play GenAI companies as they transition from private to public markets. Called Morningstar PitchBook GenAI 20, the index tracks the 20 largest companies in the space, including OpenAI, Athropic, Databricks, xAI and Cohere, among others.
The index features a perpetual structure and relies on global private markets data provided by PitchBook, a Morningstar company. It weights companies based on their latest valuation, using a security cap of 20%. Companies are included in GenAI 20 only if their primary value creation comes from the development, training, deployment and orchestration of generative models as opposed to hardware, services or domain-specific end applications. Generative AI capabilities have to constitute these companies’ core product and revenue driver.
In 2024, generative AI brought in $300 billion in hyperscaler capital investments to bring existing chatbots to the next level of intelligence. By 2030, that figure will likely rise to $1.8 trillion, PitchBook forecasts. Meanwhile, revenue from generative AI companies across client devices, cloud platforms, advertising, gaming and enterprise services could reach $460 billion by 2032.
“Staying at the forefront of innovation in generative AI requires a clear view of opportunities across both public and private markets. As private markets play an increasingly critical role in technology development, having transparent and measurable benchmarks is essential,” Sanjay Arya, head of innovation, Morningstar Indexes, said in a statement. “We believe this new index helps provide clarity to one of the most important growth themes of the next decade.”
According to a statement by Dimitri Zabelin, senior investment research analyst, AI and cybersecurity, at PitchBook: “Unlike prior waves of innovation, [generative AI’s] horizontal nature allows core generative models to influence nearly every sector simultaneously, reshaping workflows, products and decision-making at unprecedented speed. As this transformation accelerates, the companies advancing foundational GenAI capabilities are increasingly central to how value is created in the technology ecosystem.”
The Morningstar PitchBook GenAI 20 follows several recently launched Morningstar PitchBook indices that track public and private markets. These include the U.S. Modern Market Index, which tracks 90 publicly-traded firms and the 10 largest firms owned by venture capital, and the Evergreen Fund Indexes, which use peer group benchmarks to measure the performance of non-traded semiliquid funds. Last year, Morningstar also started using its fund medalist rating system for semiliquid funds. According to Laura Lutton, global head of manager research at the company, as the private and public markets converge, Morningstar’s goal is to equip financial advisors with the tools to evaluate new investment products being launched in the space.
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