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The Hopper step – driving computing power

Past performance does not predict future returns. You may get back less than you originally invested. Reference to specific securities is not intended as a recommendation to purchase or sell any investment.

This is the fourth article in our AI series, you can read the other articles here:

The AI Revolution:  bringing joy to your daily commute

How AI is changing the face of global computing 

AI – helping to speed up drug recovery

 

Nvidia’s recently unveiled Hopper infrastructure marks a paradigm shift in computational power economics, collapsing the costs of computing by an astonishing 90%. This ground-breaking advancement has catapulted 'accelerated computing' into the mainstream, while also serving to highlight the antiquated nature of our existing computing infrastructure. For forward-thinking investors, this generational shift poses a golden opportunity to strategically invest in this new computing platform. 

Not only is this momentous reduction in computing costs inherently unclogging industry bottlenecks, it is also nurturing the birth of new and unforeseen markets. It's not just high-profile companies like OpenAI that can afford to train large language models anymore – lower training costs mean software giants such as Adobe, Airbnb, and ServiceNow can create and deploy domain-specific models which translate into innovative services for their clientele. 

Adobe, in collaboration with Nvidia, has utilised its vast image catalogue to train a foundational model which has led to the creation of their pioneering generative AI product, Firefly. Firefly is consumer-centric, differentiated, and democratises creativity by lowering barriers to entry – it's now easier than ever to make photographs look professionally edited. This is naturally beneficial to the consumer, while also serving to grow Adobe’s addressable market as more consumers enter the creative domain.

Meanwhile, Airbnb has been able to capitalise on its treasure trove of data, training its pricing algorithm to dynamically optimise pricing across its platform. This approach helps strike a precise balance between supply and demand, driving up supply utilisation and guaranteeing that customers can always find the best value accommodation. Consequently, Airbnb has become the go-to starting point for 90% of customers searching for short-term vacation housing, enhancing platform stickiness and trimming customer acquisition costs.

What happens when companies lack the necessary expertise to train large language models on their domain-specific data? This is where ServiceNow steps in, leveraging its long-standing partnership with Nvidia to empower businesses to incorporate generative AI into their operations, addressing bottlenecks across their myriad customer industries. A prime example is United Healthcare’s call centres, where generative AI helps resolve issues with scaling analogue fixed costs in line with customer growth – a long-standing thorny issue for the group, and whose resolution both reduces operational costs and opens the door for future growth.

From a consumer standpoint, the implementation of generative AI across products and services often remains unseen, much like how Google Maps subtly revolutionised location services to the benefit of all users. However, we will undoubtedly notice when industry bottlenecks dissolve, as services become available at substantially lower prices. Given the current backdrop of rising inflation it is hardly surprising that this innovative technology is being adopted with such fervour. The technology stands ready, and the time to tackle these pressing issues is now.

Understand common financial words and terms See our glossary
KEY RISKS

Past performance is not a guide to future performance. The value of an investment and the income generated from it can fall as well as rise and is not guaranteed. You may get back less than you originally invested.

The issue of units/shares in Liontrust Funds may be subject to an initial charge, which will have an impact on the realisable value of the investment, particularly in the short term. Investments should always be considered as long term.

Investment in funds managed by the Global Innovation (GI) team may involve foreign currencies and may be subject to fluctuations due to movements in exchange rates. The team may invest in emerging markets/soft currencies or in financial derivative instruments, both of which may have the effect of increasing volatility.

DISCLAIMER

This is a marketing communication. Before making an investment, you should read the relevant Prospectus and the Key Investor Information Document (KIID), which provide full product details including investment charges and risks. These documents can be obtained, free of charge, from www.liontrust.co.uk or direct from Liontrust. Always research your own investments. If you are not a professional investor please consult a regulated financial adviser regarding the suitability of such an investment for you and your personal circumstances.

This should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Examples of stocks are provided for general information only to demonstrate our investment philosophy. The investment being promoted is for units in a fund, not directly in the underlying assets. It contains information and analysis that is believed to be accurate at the time of publication, but is subject to change without notice. Whilst care has been taken in compiling the content of this document, no representation or warranty, express or implied, is made by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified. It should not be copied, forwarded, reproduced, divulged or otherwise distributed in any form whether by way of fax, email, oral or otherwise, in whole or in part without the express and prior written consent of Liontrust.

Storm Uru
Storm Uru
Storm is a lead fund manager of the Liontrust Global Innovation, Liontrust Global Dividend and Liontrust Global Technology funds. He has 12 years industry experience, including as a fund manager and trader and prior to Liontrust worked at Neptune Investment Management running global funds and covering the global industrials sector. He holds an BBS in finance and MBS in international business from Massey University, an MBA from Oxford University and is a CFA Charterholder. He represented New Zealand in rowing at the 2008 and 2012 Olympic Games, winning bronze in London in 2012.

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