SoundHound AI (SOUN -1.42%) may not take pleasure in the identical hype as Nvidia or Palantir within the inventory market, however this mid-cap voice AI firm is quietly increasing its footprint throughout the globe. In doing so, it could be constructing one thing far greater than most traders at present notice.
Whereas SoundHound AI is greatest recognized for powering restaurant drive-thrus and automobile infotainment methods, there’s way more to its development story. From Asia to Latin America, it is tapping into one of the vital important, neglected alternatives in AI: the shift to voice as the first human-machine interface.
Picture supply: Getty Pictures.
A multilingual AI voice platform
Among the many strongest but underrated property SoundHound AI has are its built-in and proprietary options for greater than 25 languages. That is greater than only a technical feat. In international markets, providing a voice AI interface that features correctly in native languages is a must have. English-only will not reduce it.
As firms proceed to combine AI into new bodily methods, from automobiles to sensible home equipment, the power to handle native language and cultural nuances will turn into a major aggressive benefit. That is exactly why SoundHound has been profitable new contracts and partnerships.
Within the first quarter of 2025, it partnered with Chinese language tech large Tencent to broaden its footprint within the international auto market, constructing on its present relationships within the trade with producers corresponding to Hyundai, Kia, Stellantis, and Samsung‘s Harman division.
SoundHound AI additionally renewed contracts with two Japanese multinational firms that provide providers throughout quite a few industries, and it signed a deal to supply a significant Latin American resort developer with an AI agent concierge.
These partnerships level to one thing greater: Demand for AI-powered voice interfaces is not restricted to the U.S. It is a international pattern, and SoundHound AI is rising as a pacesetter within the area.
Huge alternatives for growth in core industries
SoundHound AI’s most important and apparent alternative lies within the international automotive trade, and it isn’t onerous to see why. In 2024, new gentle automobile gross sales reached 88 million items globally, and this quantity is anticipated to extend to 95 million by 2028. Automakers are racing to make automobiles extra linked, voice-enabled, and clever — and SoundHound AI is correct on the heart of that transition.
Based on the corporate, its voice AI is in simply 3% to five% of the automobiles bought by its present prospects. In different phrases, the corporate has already landed some massive purchasers — it now must develop its relationships with every of them and to signal new offers with different OEMs globally.
There are a number of the reason why SoundHound AI is within the driver’s seat relating to rising its automotive enterprise. Not like rival purposes like Siri, Alexa, or Google Assistant, SoundHound provides a completely embedded voice AI that runs straight on every automobile’s native {hardware} — no cloud connection or exterior ecosystem is required.
That issues so much to automakers, because it permits them to take care of management over consumer information and retain their branding fairly than handing over the consumer expertise to Apple, Amazon, and Alphabet. This unbiased, customizable platform is a major promoting level in an period when manufacturers wish to management their in-car expertise from finish to finish.
One other apparent space for international development is the restaurant trade. Within the U.S., SoundHound is already working with distinguished chains corresponding to White Citadel, Chipotle, Jersey Mike’s, and others to deploy its voice AI to deal with buyer interactions throughout cellphone ordering, kiosks, and drive-thrus.
However the greater prize could also be abroad. Within the U.S., the corporate views its complete addressable market within the area at round 800,000 eating places, however globally, the quantity is much larger. As soon as it has absolutely confirmed the worth of its product within the U.S., growth into worldwide franchises would be the logical subsequent step.
Extra industries, extra monetization
Whereas automotive and eating places are SoundHound’s most established verticals immediately, the corporate’s long-term alternative goes far past these two industries. As voice interfaces turn into extra succesful, dependable, and pure, new use circumstances are rising, opening the door to broader monetization.
The corporate has already expanded into areas like:
- Customer support name facilities, the place AI brokers (leveraging generative AI applied sciences) can automate routine cellphone interactions, bookings, and assist.
- Sensible dwelling and Web of Issues (IoT) units, the place embedded voice interfaces enable producers to create branded, offline-capable experiences.
- Hospitality and retail, the place AI voice assistants assist with check-ins, concierge providers, or hands-free help in shops.
Every of those verticals provides a definite monetization mannequin — from usage-based software-as-a-service contracts to per-device royalties to potential income sharing in commerce and transactions. As extra industries undertake voice AI, SoundHound’s diversified income streams might assist it scale effectively.
What it means for traders
SoundHound AI should still be at a reasonably early stage of its development, nevertheless it’s quietly assembling the constructing blocks of a worldwide voice AI empire.
If voice is certainly going to be the following main digital interface — and there are many indicators that it will likely be — SoundHound AI is an organization that traders will wish to maintain an in depth eye on.
John Mackey, former CEO of Entire Meals Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of administrators. Suzanne Frey, an govt at Alphabet, is a member of The Motley Idiot’s board of administrators. Lawrence Nga has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Alphabet, Amazon, Apple, Nvidia, Palantir Applied sciences, and Tencent. The Motley Idiot recommends Stellantis. The Motley Idiot has a disclosure coverage.
