Season 6, Post 37: Two ends of the data spectrum
Last week was a busy one for your author. Notwithstanding moving house, he had the opportunity to attend Big Data LDN as well as joining a small group meeting with Rene Haas, the Chief Executive of ARM Holdings, a key player within the digital ecosystem. The key message from both events: you’ve guessed it… AI is – still – front and centre of all discussions.
Begin with Big Data LDN, which is billed as the UK’s leading data, analytics and AI event. Perhaps the clue is partly in the name, but in contrast to prior years when your author has attended (see here and here), the ubiquity of all things AI-related was plain to see. Some of the presentations in the dedicated ‘generative AI’ theatre were standing room only and, as one attendee remarked to your author, there “wasn’t a single talk that didn’t mention AI ten times over.” Everything, it seems, has become prefixed by the term ‘AI’ or ‘AI powered’. Another attendee felt that the term was being “weaponised” in attempts to demonstrate strategic differentiation.
It is sometimes hard to disentangle superficiality versus substance at an event such as this, particularly when executives from major UK corporates such as Aviva, Boots, Lloyds, Morrison and Vodafone are discussing the topic. Sure, there is a certain vested interest, in seeking to demonstrate being ahead of the competition, but talking about strategy is very different to implementing it. Many companies continue to conflate big data analysis with generative AI, in our view. The first does what it says, while the latter is specifically engineered to drive unprompted insights. Anecdotally, many were also of the opinion that initial Copilot trials have not lived up to expectations.
In any outcome, the amount of data produced and consumed looks only to be heading one way, an insight we first posited over a decade ago. This is clearly beneficial for a business such as ARM, the world leader in semiconductor compute architectures. Its CEO was of the view that there is an “increased desire” on the part of its customers to add more compute capacity. Much of this, of course, is being driven by AI. When asked what might prove to be the killer app arising from this new technology, the answer was a surprising mundane but highly valid one: where AI can add value is through more inferencing. Imagine the better organisation (access, retrieval, suggestions etc) of your photos, healthcare patterns or even your corporate data. This could be enough to drive a hardware upgrade cycle.
24 September 2024
The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Heptagon Capital is an investor in ARM Holdings. The author of this piece has no personal direct investment in the business. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.
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Alex Gunz, Fund Manager
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