Sygnia sharpens its FAANG to take a bite out of AI.
While living in exile before the 1917 Russian Revolution, Vladimir Lenin famously said: "There are decades where nothing happens, and there are weeks where decades happen.”
More than 100 years later, Lenin’s words ring true in the current context of the artificial intelligence (AI) revolution taking place at time-warping speeds.
Whether we like it or not, we would be foolish not to take note of predictions from prominent figures such as Bill Gates, who has hailed OpenAI's GPT-4 as the most important technological advance since the graphical user interface.
While change is often scary, history suggests that automation ultimately leads to job growth, increased wages and improved quality of life.
In terms of investment, the AI revolution undeniably signals an era of new opportunities for investors – one that is arguably comparable to the dawn of the internet.
Leaders of the pack
The total value of AI startups escalated to $48 billion in 2022 - six times their worth just two years earlier. At such an exponential growth rate, it is likely that AI companies will soon surpass the enterprise value of internet companies.
Leading tech giants have taken note of this trend and have embarked on significant merger and acquisition activities to maintain their dominance in the market.
These include Microsoft increasing its stake in OpenAI, Alphabet acquiring AI avatar start-up Alter, and IBM acquiring multiple AI companies.
Meanwhile, Apple has been discreetly enhancing its AI assets with strategic acquisitions such as AI Music and WaveOne.
When considering both the incredible resources of these tech behemoths, and the potential opportunities AI could provide, it is unsurprising to see such a strong focus on getting first-mover advantage.
Sygnia's strategic move into AI
South Africans who are interested in investing in AI can choose from several exchange-traded funds (ETFs) that track AI-based stocks.
However, these are predominantly focused on niche sectors within AI - like robotics - and do not cater to large language models (LLMs), which is a sector that shows immense promise.
The exception to this is the Sygnia FAANG Plus Equity Fund, which has been strategically repositioned to allow for exposure to key sectors driving LLM - such as chip manufacturing, cloud technology, and other cloud products.
This is the equivalent of selling shovels to miners, since LLMs require significant processing power to test and calibrate their models.
FAANG's exposure to global semi-conductor tech giants like Nvidia, ASML and AMD has been incredibly successful for example, Nvidia is up 170% so far this year.
Many players do not want to invest in high-power machines and instead run their models in the cloud, though, so FAANG also invests in leaders in cloud services such as Microsoft and Amazon.
Niche providers with innovative cloud services such as SNOW offer exciting opportunities, too, and many industry-leading product providers are enhancing their existing offerings by embracing LLM.
These include:
Google and Microsoft’s aggressive competition on their AI-based search offerings.
Adobe Firefly - an exciting AI software that will revolutionise AI by using decentralised data sources.
Salesforce’s Einstein is a suite of AI-powered features designed to make their customer relationship management systems smarter and more efficient.
Baidu recently unveiled its latest AI model, Ernie 3.0, which is expected to have a significant impact on various industries, including healthcare, finance and education.
Hewlett Packard Enterprises has developed a new solution for AI development and training at scale.
Oracle aims to become the “Netflix of AI” via its family of “accelerated infrastructure, artificial intelligence and machine learning services.”
FAANG locked and loaded for AI
The Sygnia FAANG Plus Fund is benefitting hugely from its positioning, as it is ranked first out of 96 funds in the year-to-end April, and first out of 50 funds since inception in the ASISA Global equity – General category.
“AI’s potential to radically change the world and the global investment landscape is indisputable,” said Sygnia Head of Investment Kyle Hulett.
“Sygnia is – and will continue to be – at the forefront of that change in the South African investment landscape.”
“We are excited to continue bringing a new world of AI investment opportunities to our clients in rapid succession.”
Source: https://mybroadband.co.za/news/industrynews/497459-ai-is-the-new-internet-ready-to-invest.html