Private innovators—often small startups or specialized units within larger corporations—are pushing the boundaries of technology and redefining traditional business models. From doctors’ offices to outer space, these companies are introducing new technologies that could unlock unprecedented market value.
Investors have taken notice. Increasing private capital funding demonstrates strong interest in those projects. Dry powder ended 2026 at $4.3 trillion and 2025 private‑equity take‑private activity was the second-highest in the last decade. Meanwhile, larger public companies seek partnerships and consolidation with smaller private firms to leverage the opportunities they represent.
Morgan Stanley Research has identified areas where private companies are driving transformative change. Here’s a look at some of the most compelling opportunities.
Data Centers in Space: Computing Beyond Earth
A growing number of private firms are developing infrastructure to operate data centers in orbit, including GPU-equipped satellites forming an orbital compute cloud.
“Space-based data centers face challenges such as data governance, regulation and maintenance,” says Adam Jonas, Morgan Stanley’s Embodied AI/Robotics Strategist. “But at scale, they offer unique advantages over terrestrial facilities.”
These benefits include:
1. Cooling efficiency: Space temperatures hover around -270°C, dramatically reducing cooling costs for GPUs.
2. Unlimited solar power: Unlike on Earth, solar power in space is uninterrupted and abundant at all times. That provides reliable energy without atmospheric losses or weather variability.
3. Global edge connectivity: At scale, optimally positioned satellites can improve connectivity, reducing data latency compared to long-haul terrestrial routes.
4. Scalability: Falling launch costs and reusable rockets make large-scale deployment increasingly feasible.
Privately owned companies and startups are introducing innovations to make orbital data centers feasible, and three private companies involved in infrastructure for orbital data centers projects have raised more than $700 million in funding1.
Autonomous Vehicles Near an Inflection
After more than two decades of technological developments, autonomous vehicle (AV) service is now available in eight major U.S. cities. A significant acceleration—driven mostly by private companies—is likely to occur in 2026, with 33 consumer launches and expansion into nine more cities.
“2026 is set to be a year for inflection,” says Brian Nowak, head of U.S. Internet Research at Morgan Stanley.
Based on Morgan Stanley estimates, AV miles driven in the U.S. reached 116 million in 2025 and are projected to grow at an average annual rate of 103% through 2032—reaching ~16 billion miles. Even then, AV miles will represent around 0.5% of total U.S. miles driven and about 30% of rideshare miles, underscoring the vast growth potential.
“Investors will closely be monitoring those metrics to see which companies are moving fastest” Nowak says. “Both public and private players in the AV ecosystem—which includes makers of cars, sensors and cameras; software developers; and rideshare companies—are scaling production and forging partnerships to capture this opportunity.”
U.S. Drone Deficit: A Strategic Gap
The Russia-Ukraine conflict has highlighted drones’ critical role in modern warfare. Increases in defense spending are likely to boost the demand for AI-enabled drones and low-altitude robots in 2026. In Europe alone, defense spending is likely to rise to more than 700$ billion by 2030, according to a Morgan Stanley AlphaWise survey on defense spending.
Drone manufacturing is currently dominated by China, which controls about 70% of the global drone market and keeps the industry heavily localized.
“Although there are some drone manufacturers in the U.S., a bulk of global drone manufacturing likely relies on Chinese motors, magnets and other components,” notes Adam Jonas. “Someone will need to step up if the U.S. wants to compete.”
In July 2025, the Department of Defense released the memo “Unleashing U.S. Military Drone Dominance,” aiming to bolster the domestic manufacturing base, deliver thousands of low-cost systems to military units and integrate drone operations into training programs. The plan includes the purchase of millions of drones in the coming years—up from roughly 50,000 annually in recent years.
“The drone market is currently one of the most underappreciated strata within the embodied AI ecosystem, with ripe opportunity for a number of private players to capture a piece of what could potentially be far larger than the global auto market,” Jonas says.
Funding for the sector more than doubled last year: Private companies involved in drone technology and manufacturing raised more than $10 billion from global venture capital in 2025, up from $4.5 billion in 2024.
Cybersecurity for Operational Technology: A $22 Billion Market
The increasing threat of ransomware attacks on manufacturing and infrastructure has spotlighted the need for operational technology (OT) security. Morgan Stanley Research estimates the OT security market could reach $22 billion in the coming years.
“Critical and growing industries like energy infrastructure, aerospace, defense and robotics must invest heavily in OT security,” says Meta Marshall, Morgan Stanley’s Cybersecurity and Network and Equipment Analyst. “Each connected device—whether a sensor, gateway or controller—creates a new potential entry point for malicious actors, widening the attack surface and challenging traditional security models.”
The OT security market is largely led by private companies. More recently, large public cybersecurity companies have announced products or acquisitions in the space. “However, for now, we would believe that the privates—with their vast vertical and vendor-specific knowledge—will be best equipped to capitalize on this market opportunity,” Marshall says.
Ambient AI Scribes Take Healthcare by Storm
AI-powered scribes are becoming commonplace in medical settings, recording patient-provider conversations and integrating notes into electronic health records. This technology reduces clinician burnout and boosts productivity while maintaining oversight and privacy.
Investors have taken notice: AI-enabled scribe startups have raised $3.4 billion over the past five years, accounting for about 10% of total digital health funding. Morgan Stanley Research projects a long-term market opportunity of as much as $11 billion.
“Inpatient adoption is still low—around 20%—but could double within a year as emergency rooms embrace the technology,” says Craig Hettenbach, Morgan Stanley’s Healthcare Technology Analyst.
Consolidation is also on the radar. As typical with emerging technologies, the market for AI scribes is fragmented. Companies are seeking partnerships and M&A to gain scale.
“We are watching what private equity does, given their ownership of many revenue cycle management companies, which manage the entire patient care process, from appointment scheduling to billing and collections,” Hettenbach says. “We see the lines blurring between ambient scribes and RCMs, which could lead to M&A.”
