Generative artificial intelligence (AI) took the world by storm last year when ChatGPT was unleashed on the public. Within two months of its launch, it had attracted more than 100 million active users.
With their share prices rising rapidly, it’s perhaps not surprising investors focused on the Magnificent Seven (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla) linked to the AI revolution.
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 said: “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.
Data centres are experiencing a once-in-a-generation growth and we’re seeing a lot of activity in the sector
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 four 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 needed to enable 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.
Autonomous vehicles may generate four terabytes of data each day. That’s the equivalent of an average person using a smartphone for 60 years
Last month, for example, Digital Realty, 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 around $7bn.
That’s another magnificent seven. And more of the same is required to fuel the AI revolution.
Matthew Norris is director, real estate securities, at Gravis Advisory
