SES AI (SES 3.89%) stock shot up 11.3% through 10 a.m. ET Tuesday morning after the battery research and development shop announced plans to use artificial intelligence (AI) to develop better rechargeable batteries for electric cars.
It didn't hurt, either, when SES AI announced its partners in the project: AI heavyweights Nvidia and Super Micro Computer.
Valued at $405 million, tiny SES AI nonetheless bills itself as "a global leader in the development and manufacturing of high-performance Li-Metal batteries." And in an effort to grow into that title, the company announced today a "groundbreaking initiative to accelerate material discovery in electric transportation ... by mapping the universe of small molecules using a cutting-edge supercomputer optimized for artificial intelligence."
SES says it will use the "Crusoe Cloud" AI platform, powered by NVIDIA HGX H100 GPU clusters and running on Supermicro servers, to generate a comprehensive database of small molecules useful in building lithium batteries. It will then build a multimodal large language model (LLM) to suggest molecule structures to try out -- and find out if it can build a better battery.
So far, so good. Sounds like a good use of AI to me. Still, until something comes of all this research, investors need to consider SES AI a speculative stock -- and be appropriately cautious.
Don't get me wrong. The company has prospects. Valued at $405 million, SES AI carries less than $12 million in debt, and has $295 million in cash. Literally $0.70 of every dollar of the company's market capitalization is backed up by cash at present.
On the other hand, SES AI is burning cash at the rate of more than $70 million a year. And with no revenue (much less profit) coming in, it's probably going to keep on burning cash for quite a while. Most analysts don't see SES AI turning profitable until 2031 at the earliest.
If you decide to invest in this one, be prepared for a very long wait.
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