By Dries Dury,
Fundamental Equity Portfolio Manager DPAM


Artificial Intelligence (AI) is set to revolutionise multiple industries and create immense value in the coming decade. With the rapid growth of AI-powered chatbots like ChatGPT and the increasing demand for computing power and semiconductor chips, companies across various sectors are vying for a slice of the AI pie. But which firms will come out on top?

Artificial Intelligence (AI) will be the most significant thing of this decade, every bit as important as the PC and the internet, says Bill Gates. He was right last time when he called the internet a tidal wave back in 1995. We think he might be right again.

Just five days after its launch at the end of November 2022, ChatGPT already hit 1 million users, achieving the fastest user base growth of all time. In January, ChatGPT reached 100 million users. The AI chatbot currently boasts an estimated 600 million monthly website visitors. There is little doubt that AI will enable large productivity gains for software developers, design engineers, creative designers, and even accountants.

As investors, it is key to identify who will capture the created value. We identify three potential winners. First, cloud infrastructure providers – such as Microsoft, Amazon, and Alphabet – are providing the necessary computing power and storage for companies transitioning their operations into the AI era. Microsoft has seen its AI revenues double every quarter for five consecutive quarters. Nvidia has just announced its “AI-as-a-service” offering, the Nvidia DGX cloud, which is a supercomputer accessible through your browser, in partnership with the cloud providers. The DGX cloud is expected to make AI more accessible to a wide range of enterprises.

Second, software companies with leading AI capabilities will benefit too. Big software companies could further consolidate their markets through their access to large data sets, a pre-requisite for training the best AI models. For instance, AI is a game changer for cybersecurity companies like Crowdstrike. The cloud and AI allow them to detect security breaches and take remedial action in real-time. Customers will likely gravitate towards the vendor with the biggest network (i.e., the best data set) and most advanced AI capabilities.

Thirdly, there can be no AI gold rush without the necessary picks and shovels, which brings us to the role of semiconductor companies. The AI wave increasingly requires computing power, and hence semiconductor chips and equipment. Training AI models is done on GPU chips, typically made by Nvidia, but AMD is a challenger. Determining the dominant market player in inference, the usage of the AI model, is less straightforward. However, AMD might be in a good spot thanks to innovation in their CPUs and their affinity with accelerators. AI will boost many companies along the semiconductor value chain, from design software companies (e.g., Synopys), outsourcing partners (e.g., TSMC), and semiconductor equipment providers (e.g., ASML, ASMI, BESI, etc.). In fact, Nvidia’s CEO, Jensen Huang, recently commented that AI processing has accelerated by a million times over the last decade. Through new chips, interconnects, and algorithms, Nvidia hopes to accelerate AI by another million times over the next ten years.

To be continued.


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Marketing communication. This is not investment research. Investing incurs risks. Past performances do not guarantee future results.

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