Generative artificial intelligence (AI) took the world by storm last year when ChatGPT was ‘unleashed’ on the public. And with their share prices rising rapidly, it’s perhaps not surprising that investors focused on the ‘magnificent’ seven (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla), which have subsequently been making the headlines.
The potential uses for AI are frankly mind-blowing and the sector is still very much in its infancy.
At the recent International Monetary Fund economic summit in Switzerland, head of the organisation Kristalina Georgieva, commented, “We are on the brink of a technological revolution that could jump start productivity, boost global growth and raise incomes around the world.”
But to my mind it’s still very much a guessing game in terms of who will win the AI race and, as it is likely to pervade pretty much every area of the global economy and every inch of our lives, it’s difficult to know what to invest in.
What we do know is that AI – in whatever form it takes or whatever use it fulfils – needs data. And a lot of it. Consider this: Intel estimates that autonomous vehicles alone may generate 4 terabytes of data each day. That’s the equivalent of an average person using a smartphone for 60 years. And that’s just one application that uses AI.
So investors would do well to look at the infrastructure that is needed to enable all the mass adoption of AI – the next generation digital infrastructure: the data centres, the communications towers, the fibre networks and the energy storage that will make it all possible. The picks-and-shovels of the AI goldrush, if you will.
Data centres, in particular, are experiencing a once-in-a-generation growth and we’re seeing a lot of activity in the sector. Last month, for example, Digital Realty a holding in the VT Gravis Digital Infrastructure Income fund and the largest global provider of cloud- and carrier-neutral data centres, colocation and interconnection solutions, created a joint venture with private equity firm Blackstone to develop four hyperscale data centre campuses across three metro areas on two continents, with a total estimated development cost of c. $7 billion.
I see more of the same in the future.
Find out more about the VT Gravis Digital Infrastructure Fund here.
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