The Next Big Theme: June 2024

Chipmakers design ever-more powerful processors, big tech spends billions to build more datacentres, and the US get ready to expand the grid. Join us in this month’s “Next Big Theme” as we explore recent news and developments in artificial intelligence, infrastructure development, robotics, and more.

Artificial Intelligence

AI Chip Upgrade Cycle Intensifies

Chipmakers are racing to launch faster and more powerful processors to stay competitive. AMD recently announced several new AI chips in an effort to capture incremental market share, including the Ryzen AI 300 Series. A competitive product to Qualcomm’s Snapdragon X, the Ryzen AI 300 Series will power Microsoft laptops featuring the AI chatbot Copilot.¹ AMD introduced the Ryzen 9000 Series for gaming and content creation desktops, claiming it will be the world’s fastest consumer PC processor.² In addition, AMD also announced that the Instinct MI325X accelerators, an improved version of its MI300 series, will be available in Q4 2024.³ Similarly, Nvidia announced that its next-generation AI chips, dubbed Rubin, will succeed the Blackwell model that it unveiled just this March, and is still not yet widely available.⁴ This rapid turnaround highlights the competitive frenzy in the AI chip market. Previously on a two-year upgrade cycle, Nvidia shifted to an annual cadence in an effort to maintain its leadership. AMD plans to release new AI chip technology every year as well.⁵

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Big Tech & Digital Infrastructure

AI Boom Fuels Datacentre Buildout Explosion

Demand for new datacentre buildouts isn’t showing any sign of slowing down, especially among major cloud service providers. Amazon Web Services (AWS) recently announced an $11 billion investment for a massive datacentre complex in Indiana, marking the largest capital investment in the state’s history.⁶ Google is also set to construct a $2 billion datacentre in Indiana and spend an additional $1 billion to improve existing facilities in Virginia.⁷ Meta received approval from the Iowa Economic Development Authority to build a two-building datacentre on a 328-acre campus in Davenport, Iowa.⁸ Meta is also embarking on a multi-billion-dollar datacentre project in Wyoming, aiming to construct one of the state’s most significant high-tech projects ever.⁹ Meta has targeted Wyoming because of the state’s favourable climate, which can keep the company’s super-heated enterprise system a few degrees cooler than what is typical with water systems. Another benefit with Wyoming is its proximity to vital infrastructure, such as a major high-speed internet trunk line.¹⁰

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US Infrastructure

Transmission Projects to Enhance US Grid Reliability

The US Department of Energy (DoE) revealed a preliminary list of 10 potential high-priority transmission projects, spanning about 3,500 miles in areas of urgent need.¹¹ These projects are slated to receive federal funding and expedited permitting, which is significant because the permitting process is typically one of the primary hurdles for US transmission projects. Expanding transmission capacity is crucial for improving grid reliability and supporting the anticipated growth in renewable energy. The DoE plans to announce the selected projects and refine their geographic boundaries in fall 2024.¹² These initiatives could access up to $4.5 billion in funding, with $2.5 billion allocated through the Inflation Reduction Act.¹³ Also, in May, the bipartisan Federal Aviation Administration (FAA) reauthorisation bill was signed into law.¹⁴ This bill authorises over $105 billion in funding for the FAA, along with $738 million for the National Transportation Safety Board for fiscal years 2024 through 2028. Its aim is to enhance aviation safety and invest in airport and air travel infrastructure nationwide.¹⁵

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Robotics & Automation

Robotic Assisted Surgical Devices Are Gaining Wider Acceptance 

Intuitive Surgical received clearance from the FDA for a labelling revision for its da Vinci X and XI surgical robotic platforms, which are used in radical prostatectomy, a procedure to remove the prostate gland after a cancer diagnosis.¹⁶ The FDA’s decision confirms the legitimacy of Intuitive Surgical robotic procedures and paves the way for further advancements in robotic assisted surgical devices. Supporting the decision was real-world data from 2007 to 2014 that involved nearly 25,000 US patients who underwent surgery for treatment-naïve prostate cancer. The patients showed comparable 5–10 year survival rates for both robotic-assisted and non-robotic radical prostatectomy procedures.¹⁷ Intuitive worked with the FDA, healthcare analytics company Aetion, and the National Evaluation System for Health Technology (NEST) to validate the real-world data.¹⁸

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Cybersecurity

Industry Consolidation Continues as AI Presents New Opportunities

The rapidly evolving enterprise technology landscape, driven by digital transformation and AI advancements, poses significant cybersecurity challenges. To enhance their security operations, thwart threats, and expedite incident response with advanced AI tools, cybersecurity leader Palo Alto Networks (PANW) and technology stalwart IBM entered a new partnership. Under the agreement, IBM will integrate its internal security solutions with PANW, making PANW its preferred cybersecurity partner for network, cloud, and security operations centers (SOC).¹⁹ PANW will acquire IBM’s QRadar SaaS platform, renowned for its threat detection and compliance capabilities, and transition existing QRadar clients to Cortex XSIAM, its next-generation SOC platform powered by AI.²⁰ Additionally, PANW will integrate IBM’s watsonx large language models into Cortex XSIAM to further strengthen its cybersecurity solutions.²¹ And, IBM will train more than 1,000 of its security consultants on migration, adoption, and deployment of PANWs products, enhancing IBM’s leadership in cybersecurity consulting.²² This alliance underscores the industry’s shift towards consolidating to provide comprehensive end-to-end solutions that are underpinned by AI.

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Related Funds

GXAI: The Global X Artificial Intelligence ETF (ASX: GXAI) invests in global companies involved in AI development, AI-as-a-service, provide AI compute power, or design and manufacture AI hardware.

FANG: The Global X FANG+ ETF (ASX: FANG) invests in 10 companies at the leading edge of next-generation technology that includes household names and newcomers.

PAVE: The Global X US Infrastructure Development ETF (ASX: PAVE) invests in US-domiciled companies involved in the construction, engineering, material procurement, transportation, and equipment distribution processes of infrastructure projects.

ROBO: The Global X ROBO Global Robotics & Automation ETF (ASX: ROBO) invests in robotics and artificial intelligence companies, including those involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles.

BUGG: The Global X Cybersecurity ETF (ASX: BUGG) invests in cybersecurity companies whose principal business is in the development and management of security protocols preventing intrusion and attacks on systems, networks, applications, computers, and mobile devices.