The BrainChip Holdings Ltd (ASX: BRN) share price is under pressure on Wednesday.
In afternoon trade, the artificial intelligence technology company’s shares are down 3.5% to 55 cents.
Why is the BrainChip share price under pressure?
Investors have been selling the company’s shares on Wednesday following the release of its annual general meeting presentation this morning.
One thing that was included in the presentation that could be weighing on the BrainChip share price was its progress, or lack thereof, in finding a replacement CEO.
Two and a half months ago BrainChip announced the surprise exit of its CEO, Louis DiNardo, by mutual agreement. However, an appointment doesn’t appear to be imminent.
Chairman Emmanuel T. Hernandez commented: “For the first couple of months since Mr DiNardo’s departure, management and the Board focused on tapping our individual networks for potential candidates. We are pursuing certain people on our list and in parallel have evaluated search firms that we might engage after exhausting our own network of candidate.”
Given how the company is currently at an important stage in its journey, not having a captain to steer the ship poses risks.
What else was said at the meeting?
There were a few potential positives from the meeting that failed to have an impact on the BrainChip share price. One of those is its market opportunity.
Interim CEO, Peter AJ van der Made, explained: “You can see that by 2025 the market size [for edge devices] reaches nearly $58 billion distributed over industrial uses, mobile uses, consumer goods, automotive systems (ADAS, preventative and safety systems), and drones. I expect that air and space craft will also be included in this group.”
“The prospects for the Brainchip Akida technology are huge. Many, if not most of these systems will need an Artificial Intelligence processor that is small, light, fast and power efficient. We deliver all those capabilities in the AKD1000.”
“The number of ‘Internet of Things” devices will triple between today and 2025. All these devices will be competing for internet bandwidth. IoT is a category of machines and this is different from the ‘Internet of People’. With on-device near-sensor processing, enabled by Akida, internet bandwidth problems can be solved, even when metadata – that is processed already by Akida is uploaded to a central system.”
“We expect that many of today’s ‘dumb’ devices will be replaced during over [sic] this period by intelligent, Akida based devices. In addition, there will be some 20 billion new devices. This is another great opportunity for the BrainChip Akida technology. You can tell we are excited about those prospects,” he concluded.
BrainChip isn’t stopping at AKD1000 and already has plans for future products.
Mr van der Made explained: “The AKD1000 chip is in production and we expect sales to take off soon after. Initially, we expect to sell complete modules while our clients are developing their own products and boards. Those modules will contain the AKD1000 chip and the MetaTF tools.”
“This is where we expect the first production chips to be absorbed. Sales are expected to increase once clients have finished their development work and are integrating the AKD1000 into their products.”
“Module sales are likely to continue into the future, followed by new products such as the AKD2000, which will be a chip with additional features to execute sequence learning networks, known in the industry as LSTM and Transformer networks. Important parts of the AKD2000 are already working now in the lab here in Perth. The AKD3000 chip is in development and will be aimed at capsule networks that are under development at Google and the cortical neural networks of the future,” he concluded.
While this is all very promising, with the current BrainChip share price giving the company a market capitalisation of almost $1 billion, there certainly is a significant amount of future growth being priced in.
This is despite the company’s technology being largely unproven and BrainChip facing competition from huge tech giants with materially larger budgets.