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Not just NVIDIA, AI is everywhere
Technology investment

Not just NVIDIA, AI is everywhere

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28 JUN, 2023

By RankiaPro Europe

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By Dominic Rizzo, Global Technology Equity, Strategy Portfolio Manager, and Anne Daub, Biotechnology Analyst, T. Rowe Price

The more major companies invest in artificial intelligence, the more likely a new bubble in the sector will form, potentially rivaling the dot-com bubble of the late 1990s. This is one of the reasons why it is necessary to focus on the companies that will be the "cornerstones" of AI development, namely those that provide the essential tools for its further advancement.

NVIDIA and other frontline players

At the top of the list are the core companies driving progress in the production of advanced semiconductors necessary to assemble and operate basic models of artificial intelligence. The first on the list, or almost, is the chip manufacturer NVIDIA, whose graphics processing units (GPUs), originally designed for video games, have been instrumental in the development of ChatGPT and generative AI.

NVIDIA's advantage stems from the power of its GPUs in parallel processing, which is crucial for building complex neural networks that enable rapid querying of enormous datasets.

NVIDIA has also been adept at integrating into the broader ecosystem of artificial intelligence software. In 2007, the company released its Compute Unified Device Architecture (CUDA) application platform, which allows engineers to use common programming languages to design software that operates on its parallel processing chips. More recently, the company has extended the platform to collaborate with open-source software specifically designed for artificial intelligence applications.

The prospects for Advanced Micro Devices (AMD) are also promising, as it is a leader in both CPUs and GPUs. The company's new chip, the MI300, combines the advantages of serial processing in a CPU and parallel processing in a GPU.

Another significant company in the industry is Taiwan Semiconductor Manufacturing Corporation (TSMC), which has become a widely recognized leader in the production of increasingly smaller processor nodes. In addition to NVIDIA GPUs, the famous "Bionic" chips from Apple, powering the latest generation iPhones and MacBooks, are produced by the Taiwanese company.

The disruption of AI is already spreading, even beyond the tech sector.

Ironically, perhaps, the software industry seems to be among the first to be disrupted by artificial intelligence. The coding abilities of ChatGPT are formidable, and although it cannot replace human beings, we believe that this program and others can enable a greater number of super-programmers. Software engineers have long been copying and sharing code batches using GitHub and other online resources, but tools like ChatGPT exponentially accelerate code writing by autonomously performing a significant portion of the work.

Artificial intelligence can also be applied in other sectors. The T. Rowe Price team specializing in health sciences closely monitors the impact that new knowledge of protein structures and other advancements in artificial intelligence will have on drug development and other medical fields. For example, machine learning and AI have enormous potential in genomics, as they can discern patterns buried within vast and complex genomic databases. One example is the correlation between genomic data and anonymous medical records, which can lead to the discovery of pathogenic traits or, conversely, protective traits against diseases. These data offer enormous opportunities for designing and developing drugs by leveraging both aspects.

Meanwhile, we continue to examine the implications of AI for a range of other sectors and industries, while keeping in mind the uncertainties created by the unprecedented pace of change in this field.

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