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Am I invested in AI?
“Am I invested in AI (Artificial Intelligence)?” A common question we hear on the road as we update our clients. It’s no surprise with the euphoria in the market around NVIDIA, the American multinational corporation and technology company, and the high-powered Graphics Processing Units (GPUs) required. AI, a multi-decade-long-overnight-sensation, is something we have all lived with for some time but perhaps may only be paying attention to off the back of extraordinary investment returns.
The technology appears to be hitting the first sharp gradient of an “S” curve, and many companies involved in the hardware infrastructure buildout behind AI, such as NIVDIA, are booming. But what next? As with the internet 25 years before, one imagines that AI quickly becomes embedded in the economy and our companies. Or perhaps it is already?
Revolutionising Disease Evaluation and Prognosis with AI
“We evaluate the severity and prognosis of the disease through the application of algorithmic diagnostics and artificial intelligence to our tests.”1 One of our favourite immunodiagnostics companies, Diasorin (Italian listed) is already using AI as part of routine business as well as to help bring new diagnostic tests to market faster, ultimately improving patient outcomes. Its new growth engine – MeMed, which enables rapid differentiation between bacterial and viral infections to support antimicrobial stewardship, integrates AI algorithms to measure the host immune response proteins. MeMed opens up a $400m market opportunity in the US for Diasorin, significant in the context of total annual revenues in 2023 of €1,163m.2 Healthcare may not be the first sector that comes to mind, but it is clearly already in use, and there are great hopes from day to days tests such as this example, to an acceleration for drug discovery.
Unlocking New Frontiers in Industrial Automation
Elsewhere, in some of the oldest industrial settings – such as industrial steam - companies are using AI. Spirax Sarco (UK listed) is a leader in industrial steam providing “a high efficiency, mission-critical tool for diverse and important industries , increasingly relevant as part of our sustainable future.” It is here that AI is creating new opportunities for automation, previously not possible. In another example that is fundamental to their business model, Spirax believe AI will enable fully autonomous steam systems that improve productivity and efficiency, thanks to the ability to run algorithms on the factory floor, rather than sending them into the cloud, speeding up autonomous systems. From one of the original “S” curves in industrialisation, to the latest.
The common thread is significant productivity improvements, and this is where some of the biggest gains may be made. Zebra Technologies (US listed) helps businesses to monitor, anticipate and accelerate workflows through robotics, machine vision, automation and digital decision making. Combined with their open source generative AI, front line workers can interact with customers at a far more efficient and sophisticated level regarding inventory, supply, and communication across a range of sectors including retail, warehousing, logistics, hospitality and healthcare. Fast, data driven logic for better understanding and managing supply chains provides enormous opportunity for reduced wastage and importantly, reduced environmental impact for industries such as garments and electronics.
AI impact on construction and infrastructure
But it remains the technology focussed fields that we conjure up most ideas about AI. This is the case for our building and infrastructure technology company Nemetschek (German listed). For over 50 years the company has been driving technological change in the construction and infrastructure industries. Today it hosts entire conferences showcasing its AI in infrastructure construction, helping achieve maximum efficiency along the planning process, extending building useful lives, and improving sustainability. The digital twin field of construction and infrastructure is where the larger benefits are derived, providing the ability to perform in-depth analysis of an asset’s performance based on historical data, previous maintenance needs, and contextual data processed in real time. As AI ingests this data it becomes better at predicting maintenance and helps to cuts costs. According to Dr Jimmy Abualdenien, Head of Digital Product, “AI-powered digital twins provide a more advanced and viable solution for reducing environmental impacts than ever before.” For Nemetschek, AI is a defining feature of their business model.
It seems at times the application of AI has no bounds and is being implemented in every company we own, such as:
- Beiersdorf using AI to help develop personal skincare formulas faster and replace existing ingredients with sustainable alternatives.
- Jack Henry using AI help real-time detection and prevention of fraud and anti-money laundering.
- Roche using AI to accelerate innovative drug discovery work and facilitate more collaborative partnerships through community driven science. Their Rare Disease Open Science Data Challenge brings together researchers and data scientists to collaborate using patient provided data in solving some big unknowns in healthcare.
- Veeva using AI to enable life sciences companies to analyse big data sets and create predictive analytics on their AI platforms
- Distribution company MonotaRO, using AI in their distribution centres for predicting and detecting faults in materials handling equipment.
While the buildout of AI hardware is currently captivating stock markets globally, it provides the first wave of innovation in this sector. Almost all of our companies have begun their journey on the next wave – implementing and improving their business through using AI. Am I invested in AI? Yes. It’s almost difficult not to be invested in AI.
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