Artificial intelligence (AI) is transforming the world in myriad ways, from automating mundane tasks to assisting in complex decision-making. One of the most exciting applications of AI is in the emerging field of synthetic biology. Synthetic biology is the engineering of biological systems that do not exist in nature.
This offshoot of biotechnology holds the potential to solve some of the biggest problems facing humanity, such as climate change, food security, healthcare, and more. By creating novel biological products, such as enzymes, proteins, vaccines, and chemicals, synthetic biology can offer innovative solutions that are more efficient, sustainable, and cost-effective than traditional methods.
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However, synthetic biology is a technically, intellectually, and financially challenging undertaking. That's where Boston-based Ginkgo Bioworks (DNA 10.60%) comes into the picture.
A synthetic biology company that could change the world
Ginkgo Bioworks is a leading company in the emerging synthetic biology industry. It operates through two interrelated segments: Foundry and Codebase. Its Foundry business provides a platform for customers to access its state-of-the-art facilities, tools, and expertise to engineer new biological products. Its Codebase business collects and analyzes data from its Foundry projects to create a library of biological designs that can be reused and improved for future applications.
Where things get really interesting is in its use of AI. Recently, Ginkgo announced a five-year partnership with Google Cloud to use its cloud computing and generative AI platform known as Vertex to optimize its Foundry operations and Codebase insights. By using AI, Ginkgo can increase the speed, accuracy, and scalability of its synthetic biology platform, as well as generate new insights and discoveries from its vast database.
What's more, Ginkgo's unique value proposition is starting to land with customers, especially in the lucrative pharmaceutical industry. Developing new drugs is a complex and expensive process that can take years and billions of dollars. Ginkgo can help pharma companies accelerate the drug discovery process by engineering novel biological molecules that can lead to safer and more effective products.
Moreover, as Ginkgo grows its business, it also improves its operational efficiency, which makes it even more attractive to potential customers. This feature has helped the company attract multiple tier 1 pharmaceutical clients such as Pfizer, along with several promising clinical-stage companies like Arbor Biotechnologies.
Ginkgo's synthetic biology platform has also attracted significant investments from several prominent investors, such as Viking Global, BlackRock, Ark Invest, and Vanguard, among others. Wall Street thus seems to recognize the company's enormous potential, despite its early-stage nature.
But what does this mean for you as an investor?
Well, if you are looking for a long-term investment opportunity that could deliver massive returns, you might want to consider Ginkgo. The company has been compared in the media to Amazon and other tech giants in their early days, and for good reason. Ginkgo could follow a similar path as it expands its client base and slowly becomes an integral part of the product development cycle for scores of high-value clients and industries.
Of course, investing in Ginkgo is not without risks. The company is still unprofitable and it faces competition from its clients with large laboratory facilities as well as other players in the synthetic biology space.
The future of synthetic biology is also highly uncertain. There could be significant regulatory hurdles, ethical issues, or even unforeseen challenges that hamper the growth of the industry as a whole. In short, there is no guarantee Ginkgo will succeed in its ambitious vision.
However, if you are willing to take a calculated risk and invest in a company that could revolutionize the world through the integration of synthetic biology and AI, you might want to take a flier on this small-cap biotech stock.
After all, Amazon was also a relatively unknown company with big plans in 1997 when it made its public debut, and the tech giant has since gone on to revolutionize multiple industries. Ginkgo may not have that kind of global impact at the end of the day, but the company's lofty goals aren't all that dissimilar to Amazon's.
