What is driving the hype around Artificial Intelligence (AI)? Megacap technology companies and numerous start-ups are investing massively in AI software and applications, providing a huge boon for key “picks and shovels” technology suppliers such as Nvidia. But just like the California Gold Rush (1848-1855) or the 2000 internet bubble, there could be huge disappointment in the near term as the results of this investment boom could be underwhelming – the warning of Nobel Prize-winning economist Daron Acemoglu.
We are looking for indirect ways to capitalise on the growing spending in AI-related technology, which we see as much more predictable than the resulting returns from this tidal wave of technology investment.
Our recommendations
A theme focused mainly on equities
- Industrial, media/marketing and retail companies with AI-related productivity and cost gains over the next 12-24 months.
- Electricity and data-centre infrastructure.
- Robotics and automation.
- Health care drug discovery, diagnostics etc.
- Logistics efficiency.
Key risks
- Productivity and profitability from the current investment wave in Artificial Intelligence could prove to disappoint optimistic expectations in terms of delivery of growth.
- Investors may be underestimating the time needed for companies and organisations to adapt their ways of working in order to implement AI software and tools in their current business models.
