The Next Big Theme: May 2024

Hyperscalers cook up their own computer chips, generative AI drives big tech earnings, and humanoid robots experience evolution. Join us in this month’s “Next Big Theme” as we explore recent news and developments in artificial intelligence, cloud computing, robotics, and more.

Artificial Intelligence & Technology

AI Infrastructure Ecosystem Continues to Grow and Expand

Hyperscalers are incrementally prioritising in-house AI chips. Meta unveiled its latest AI accelerator chip, Artemis, which is designed to manage the increasing computing demands of AI applications on Facebook, Instagram, and WhatsApp.1 Produced by Taiwan Semiconductor Manufacturing Company, Artemis offers three times the performance of Meta’s initial processor, enabling the company to decrease its dependency on Nvidia’s chips and cut energy costs.2 Amidst growing corporate demand, Intel also unveiled its latest AI chip, Gaudi 3. Reportedly Gaudi 3 is more than twice as power-efficient and can run AI models one-and-a-half times faster than the H100 GPU that trained GPT language models like ChatGPT.3 Additionally, Intel plans to manufacture AI chips in a new Ohio factory set to open in 2027 or 2028.4 Nvidia and AMD may be among its customers.5 Google is developing its own custom Arm-based central processing unit (CPU) chips, named Axion, to support AI operations in its data centers.6 Google is also enhancing its Tensor Processing Units (TPU), an alternative to graphics processing units (GPUs) for AI acceleration, to support more intensive AI tasks.7

Explore artificial intelligence with GXAI.

Technology Giants

Generative AI Delivered a Boost to Cloud Computing Revenues

Amazon will invest an additional US$2.75 billion in Anthropic, a prominent AI startup and rival to OpenAI, at a valuation of US$18.4 billion.7 Amazon’s total stake in Anthropic is now US$4 billion, representing Amazon’s largest external venture investment.8 The investment comes shortly after Anthropic launched Claude 3, an AI model suite excelling in multimodal capabilities. Claude 3 reportedly surpasses OpenAI’s GPT-4 and Google’s Gemini Ultra in various benchmark tests, including knowledge and reasoning at various educational levels and basic mathematics.9 As part of the agreement, Anthropic will prioritise Amazon Web Service (AWS) for cloud services and use Amazon’s chips for developing and deploying its foundational models.10 The deal continues the trend of escalating AI investments by tech giants, which soared to US$24.6 billion in 2023 from US$4.4 billion in 2022.11 Nvidia’s recent unveiling of its most powerful AI processor yet, the Blackwell GPU Architecture, is another example of the intensifying AI technology race.12

Explore tech giants with FANG.

Robotics & Artificial Intelligence

New Humanoid Robots Show Their Rapid Evolution

Boston Dynamics unveiled a new all-electric version of its Atlas humanoid robot, just one day after announcing the retirement of its previous hydraulic model.11 The robot boasts a significantly enhanced range of motion, with swivelling joints that enhance its strength, dexterity, and agility.12 These improvements make it better suited for performing hazardous or repetitive tasks. The new Atlas retains a human-like form, but Boston Dynamics aims for the robot’s movements to exceed human capabilities by optimising its movement efficiency for task completion. The previous model was limited to human motions.13 Apple is also exploring the development of personal home robots and a tabletop device that uses robotics to adjust a display screen.14 Though the full scope of this early-stage initiative is unclear, we believe that robotics could enable Apple to gain a greater foothold in consumers’ homes and capitalise on advances in artificial intelligence.

Explore robotics and automation with ROBO.

Energy Transition

Renewable Energy a Focus Amidst Growing Demand for AI and Data Centers

Microsoft partnered with Brookfield Asset Management and its Brookfield Renewable affiliate in a deal worth over $10 billion to enhance renewable energy capacity.15 The deal, the largest of its kind, will concentrate on developing wind, solar, and innovative carbon-free energy sources.16 Brookfield will provide 10.5 gigawatts (GW) of renewable energy to Microsoft between 2026 and 2030 across the U.S. and Europe.17 To put this amount in context, 10.5 GW is triple the 3.5 GW currently used by data centers in Northern Virginia, the world’s leading data centre hub.18 The initiative comes at a critical time in the United States, where electricity demand is escalating due to advancements in AI, expansions in semiconductor and battery production, and the electrification of the national vehicle fleet. Following a decade of stable consumption, total electricity consumption in the United States is projected to increase 20% by the end of the decade.19

Explore energy transition metals with GMTL.

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.

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.

GMTL: The Global X Green Metal Miners ETF (ASX: GMTL) invests in global companies which produce critical metals for clean energy infrastructure and technologies, including lithium, copper, nickel, and cobalt.

 

AI is still an emerging technology, so investing in the space may involve risk. As with all investments, read the relevant PDS and TMD to assess fund-specific risks.
Forecasts are not guaranteed and undue reliance should not be placed on them. This information is based on views held by Global X as at 27/05/2024.
Past performance is not a reliable indicator of future performance.
Diversification does not ensure a profit nor guarantee against a loss. Brokerage commissions will reduce returns. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.