July 11, 2024
The Next Investments for 'Hyper' Growth
Dear Subscriber,
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| By Jurica Dujmovic |
Last week, we looked at ChatGPT as an investment tool and another AI system that appears to be a superior alternative.
There’s still time to watch that AI Profit Bonanza video. But don’t wait too long, because we’re releasing FOUR “buys” tomorrow. So, you must act TODAY to get in on them.
Next, I want to talk with you a bit more about a company whose name you can’t spell without AI: Nvidia.
Without Nvidia and its strategic partners like Amazon Web Services, Google Cloud, Microsoft Azure and even Tesla …
We might never have seen crypto prices and AI technology propelled to such new heights.
And perhaps we might have never seen my top five crypto AI projects — Fetch.ai, SingularityNET, Ocean Protocol, The Artificial Superintelligence Alliance, The Graph and iExec RLC — come into existence.
However, the latest AI advancements have inadvertently shed light on a critical component that often gets overlooked.
That is, the robust, scalable infrastructure required to support our world’s insatiable appetite for computational power.
Not just for crypto, as HODLers have long known that Bitcoin miners also burn through a lot of electricity.
Now, everyone is waking up to not just the insatiable demand for AI. But also, the massive energy demand that comes with capturing and processing the data that makes it “smarter.”
Sophisticated Tech Requires
This Sophisticated Solution
The International Energy Agency now expects crypto and AI data centers to use twice as much electricity by 2026.
But as Nvidia's AI chips and systems grow more sophisticated and widespread, the demands placed on data centers and networking infrastructure escalate exponentially.
Take Tesla's plan to deploy some 85,000 Nvidia H100 GPUs by year-end. This is a clear indicator of the scale at which AI operations are expanding. And just one of many.
At the heart of this infrastructure lies a new breed of data centers: hyperscale facilities.
Now, these are not your run-of-the-mill server rooms.
Hyperscale data centers are engineered to house tens of thousands of servers. And they can rapidly scale to meet the burgeoning demands of AI and other data-intensive technologies.
The architecture of these facilities marks a departure from traditional data center models.
Built with modularity and scalability in mind, hyperscale data centers can swiftly expand to accommodate growing AI workloads.
This flexibility is not just a feature — it's a necessity in the fast-paced world of AI.
And the location of hyperscale data centers is far from arbitrary.
These facilities are strategically located to take advantage of cheap electricity, fast network speeds and resilience against natural disasters.
Often serving as the backbone of cloud computing services, these data centers provide the raw computational muscle necessary for AI training and inference at an unprecedented scale.
As companies like Nvidia push the boundaries of AI capabilities, the demand for hyperscale facilities grows in lockstep.
More complex and data-hungry AI models necessitate larger, more efficient, and more powerful data centers.
This symbiotic relationship between AI advancement and data center evolution is fostering a robust ecosystem. One that extends far beyond the realm of chipmakers.
The hyperscale data center market is on a trajectory of remarkable expansion.
Driven by systemic changes in supply and demand, industry projections paint a picture of staggering growth.
From an estimated $44.9 billion in 2024, the market is forecast to balloon to $262.1 billion by 2032. That’s according to Value Market Research.
This represents a compound annual growth rate (CAGR) of 24.7%, highlighting the sector's immense potential.
As the AI boom continues its upward trajectory, infrastructure providers are positioning themselves to reap substantial rewards.
While Nvidia continues to innovate and capture headlines, savvy investors will note a potentially better opportunity.
The companies that facilitate the deployment and scaling of Nvidia's technologies may offer equally compelling, if not superior, investment prospects.
These businesses span a wide range, from global leaders in digital infrastructure to specialized data center operators and IT solutions providers.
Though they may not grab headlines like AI chip manufacturers, these companies are the unsung heroes building and maintaining the critical infrastructure that powers AI advancements.
Their services range from operating vast networks of data centers to providing cutting-edge networking solutions. This positions them to benefit big from the growing demand for robust, scalable AI infrastructure.
In essence, these infrastructure providers are becoming the modern equivalent of picks and shovels in the AI gold rush.
Here are some key players in this space:
- Equinix (EQIX): A global powerhouse in digital infrastructure, Equinix boasts an impressive network of 260 data centers spread across 71 major metropolitan areas in the Americas, Asia-Pacific and EMEA regions.
- Digital Realty (DLR): With over 300 data centers spanning six continents, Digital Realty is a major player in the field. They specialize in providing scalable and optimized network architectures crucial for AI and other computationally intensive applications.
- CyrusOne (CONE): This company has carved out a niche in highly reliable, carrier-neutral data centers. CyrusOne's focus is on delivering flexible and well-connected infrastructure solutions tailored to enterprise customers' needs.
- Hewlett-Packard Enterprise (HPE): HPE offers a comprehensive suite of data center infrastructure solutions, encompassing servers, storage systems and networking equipment.
- CoreSite Realty Corp. (COR): CoreSite has established itself as a provider of secure, high-performance data center solutions across key North American markets. Its strategically located facilities cater to a diverse range of enterprises and cloud providers.
- NTT Ltd.: A subsidiary of Nippon Telegraph and Telephone Corporation (NTTYY), NTT Ltd. manages over 160 data centers across 20 countries. The company is known for its state-of-the-art data center solutions and services, supporting businesses with advanced digital infrastructure.
Now, this list does not constitute a “buy” recommendation.
(To see how you can discover what our proprietary AI stock-picking technology says about these names, watch this video.)
These six companies are ones to watch closely as the AI revolution evolves.
Each is already playing a vital role in ensuring the smooth operation of AI technologies.
By enabling rapid data processing and storage, they provide the essential foundation for AI development and deployment.
The strategic placement and sophisticated design of these data centers position them to handle the ever-increasing demands of AI technologies.
This makes them crucial enablers in the tech ecosystem, offering significant long-term growth potential.
As AI continues to advance and permeate various sectors, the reliance on robust, scalable infrastructure is only set to deepen.
For savvy investors, this presents a compelling opportunity: Do you place your bets on the visible innovators, or the essential enablers working tirelessly in the background?
As AI continues to reshape industries, those who recognize the pivotal role of infrastructure may well be positioning themselves for long-term success in this transformative era.
Best,
Jurica Dujmovic
P.S. Our AI stock-picking tool has singled out four special “buy” opportunities (after analyzing more than 12,500 stocks). We’ll be sending them to a select group of Weiss Members first thing tomorrow. To get on the list, watch this video and follow the instructions at the end. But hurry, you must respond TODAY.
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