K-pop powerhouse SM Entertainment has partnered with South Korean music technology startup Verses Inc. to develop an artificial intelligence-powered rap generation platform.

The collaboration centers on Verses‘ Rappie application, which generates rap lyrics, vocals and accompanying videos using AI. The beta platform was launched in June.

Rappie processes text input to generate lyrics, vocal performances and visual content. Users can choose from virtual stages to match the vibe of the rap song and AI-powered avatars will perform the generated music with syncing facial expressions and body movements.

The platform includes real-time editing features, allowing users to modify elements within the virtual stage.

The technology builds on Verses’ previous work with SM Entertainment‘s girl group aespa in developing metaverse-powered music experiences. That project, which follows the launch of aespa world on Naver Z’s metaverse platform ZEPETO, gained recognition from Google and Nvidia, said Verses.

The partnership with SM Entertainment will produce official song releases featuring composers and an immersive extended reality (XR) concert. SM is home to K-pop acts like aespa, RIIZE, NCT 127 and NCT DREAM.

For SM, the partnership with Verses comes amid its continued investment in tech-driven content creation. The company has previously experimented with virtual concerts and digital avatars for its artists. Last year, SM partnered with South Korean mobile network operator LG Uplus to develop AI-powered content for its first virtual artist, Naevis.

Naevis first appeared in aespa’s video My, Karina in 2021 as part of their fictional sci-fi inspired universe. In aespa’s lore, Naevis is a force that helps the members navigate between the real world and the digital dimension known as KWANGYA.

In 2022, SM and its metaverse content production house Studio KWANGYA formed a joint venture with Los Angeles-based virtual reality concert platform AmazeVR to produce immersive virtual reality (VR) concerts for the metaverse.

Meanwhile, in July, A2O Entertainment, the record label founded by SM Entertainment founder Lee Soo-man, disclosed plans to launch an AI-powered chatbot in August that enables conversations between fans and A20 artists.

In the second quarter of 2025, SM reported a 19.3% YoY jump in consolidated revenue to 302.9 billion South Korean won (approx. USD $218 million), driven by surging album sales and strong merchandise performance.

Music Business Worldwide

• Around half of workers are begging for distraction-free focus time
• Many workers feel pressure to be responsive to messages all the time
• Companies could help by introducing formally scheduled down time

With AI tools now boosting productivity in workforces across the globe, workers are now hoping to afford more quiet time to focus on meaningful and creative tasks.

New data from Twilio found nearly half (47%) prioritize distraction-free focus time, and one in three (36%) even want employers to formally schedule it.

The first wave of AI stocks — including chipmakers like Nvidia and Broadcom, as well as hyperscalers like Microsoft, Meta, and Amazon — may all still be great buys.

But there’s no mistaking the high expectations that investors are placing on these household names going forward. Plus, the uber-explosive earnings growth for names like Nvidia may soon start to slow, as the company told investors in its recent earnings call.

So if you missed their run-ups in the market, you might be feeling like you missed the boat on the AI trade. (To be fair, you probably didn’t miss out entirely — these companies have huge exposures in the S&P 500 and Nasdaq 100, meaning most index investors already have some fairly sizeable positions in the AI giants.)

But if you’re looking for some overlooked AI firms, there are still plenty of opportunities out there, according to Que Nguyen, the CIO at Research Affiliates, and Brian Mulberry, a senior portfolio manager at Zacks Investment Management.

In recent interviews with Business Insider, the duo shared some of their preferred non-mega-cap AI stocks right now.

For Nguyen’s part, she said to look to stocks like Western Digital (WDC), Seagate Technologies (STX), Hewlett Packard Enterprise (HPE), and Micron Technology (MU) — all data storage providers.

“One of the things that I see is AI is spreading and benefiting an entire ecosystem of technology companies,” Nguyen said. “So you look at even boring companies like hard disk companies — in order to have AI you need to be able to store a lot of data and get it quickly, right?”

“None of these companies is nearly as expensive as the Mag 7,” she continued. “Don’t just stick with the Mag 7, or Nvidia and AMD. Look more broadly — own something diversified. You have no idea where the next killer app is going to come, or where the next big investment theme is going to be.”

Some examples of diversified products offering specific AI and tech stocks expsoure include the Global X Artificial Intelligence & Technology ETF (AIQ) and the iShares AI Adopters & Applications UCITS ETF (AIAA).

Meanwhile, Mulberry said he likes stocks like Amphenol (APH) and Emcor (EME).

Both are hardware providers, and are raking in money from hyperscalers as they spend hundreds of billions to build out their AI data centers, Mulberry said. Consensus earnings estimates for both firms show growth in the next couple of years, he said.

“They’re simply benefiting from the actual dollars being spent without having to increase their own capex,” he said of the stocks.

He continued: “They’re very specialized electrical connectors, and they don’t have to do anything other than just show up and start helping build out data centers with their expertise.”