An exchange-traded fund (ETF) manager has recognised the many opportunities arising from the development of artificial intelligence (AI) and has suggested investors should not restrict themselves to just one service provider for the sector as a result.
Specifically, Global X ETFs director of research Tejas Dessai said investors should not take advantage of the rapid advancement of the AI sector by making portfolio allocations to Nvidia, but should consider all options, including others in the chip-manufacturing space.
“We’re starting to see more diversity when it comes to AI chips. So we’re seeing more custom silicone [elements] that companies [are providing],” Dessai told attendees of a recent investor presentation in Sydney.
“[We’re talking about] companies like Broadcom, for example, [and some of the other organisations] that are working on their own chips within that space.
“We’re also seeing spending being directed towards low-power CPUs (central processing units), which are becoming incredibly popular alongside chip use.
“So if you’re looking for [investment] opportunities that are under-discovered and maybe are not overly expensive in the market, those are some of the places that you may want to look at outside of names like Nvidia or just as a complement to your Nvidia exposure.”
He also identified energy providers to data centres as offering an alternative avenue via which investors can make an AI play.
“By the end of this decade, we think global energy consumption from data centres could grow significantly. There are estimates that project nearly 2.5 to three times growth in global energy consumption,” he explained.
He pointed out the momentum in energy provision has already begun with data centres currently consuming as much power as nations such as the United Kingdom.
To this end, he noted deals are already being struck between data centres and nuclear energy suppliers to ensure their electricity needs.
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