Where the AI Money Flows and When

Later today NVIDIA is releasing their latest financial results that should show crazy growth again. From an investment standpoint there seems to be an insatiable appetite for AI. I personally have been doing a large number of presentations/webinars on the impacts/opportunity for retail at customer and partner events for vendors. Before we even get to the actual presentation I get peppered with questions at the pre-event.

But more than anything, people ask me 2 questions.

1)       What are the investment areas where I can personally invest (what am I missing from the obvious)?

And…

2)      How are retailers really using AI with case study examples?

This second question we are going to address next week in our Ask the IHL Analysts webinar and future posts. Let’s talk about investing.

Now, this is a major caveat. This is not meant to be investment advice in any particular company, but I am attempting to give you some direction where the big money will be flowing in AI for years to come.

First, we need to look at history. This chart shows timing and level of returns that came from different waves in the move to mobile. It started with silicon, then it was the devices and then the platforms and software. You can see how these waves ebbed and flowed over time.

We will have something similar in AI – much faster and much larger over time. Where mobile became another channel, AI will touch every aspect of both individual lives and enterprise. New chips are required, new data centers, modified data centers, new devices – but the huge value is in the enterprise data.

Overall, we are showing 6 categories of investments.

1)       Semiconductors

2)      Startups and Foundation Models

3)      Infrastructure – Data/Power/Cooling

4)      Hyperscalers: Platforms/Models/Enablement

5)      Software/Services (and security)

6)      Devices

So, this chart tries to represent in one chart a view of the start of money flowing into each section and a rough relationship (in thickness of boxes) as to how much money will be earned in each area. In each box is a sample list of companies/stocks that fit into those categories. Once again, this is not for any specific investment advice, just an opinion on the rough scale of where the big money will be and when it will start to flow in terms of revenues.

Please use this information with that caveat.

I hope this is helpful to organize your thoughts on investments. If you are interested in more on IHL’s AI Research and forecasts, having us speak to your clients, or other offerings, see the website at www.ihlservices.com or contact us.