TOL - 9th Oct, 2024
Nick Griffin: Every industry on the planet will lean into this technology
Artificial intelligence doesn't just affect tech. As Munro Partner's Nick Griffin explains, it affects every industry on the planet.
Note: This clip was taken from the AI Panel at Livewire Live 2024 on 17 September 2024 at Sydney's Art Gallery of NSW. You can check out the full video below:
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Munro Partners' Nick Griffin is incredibly bullish on the outlook for artificial intelligence (AI). If he had any doubts before, these were quashed by a recent research trip to San Francisco - where he learnt the hyperscalers (large cloud service providers) have no plans to slow their investment in GPUs anytime soon.
"Every single company we met, basically all the hyperscalers, told us that they're just going to build bigger and bigger clusters. They're going from 100,000 GPU clusters, to 200,000 GPU clusters, to 500,000 GPU clusters to a million GPU clusters. They're seeing no diminishing returns of scale from these models," he explained to a crowd of investors at Livewire Live 2024.
"The more compute they throw at them, the more they can do."
Griffin is confident these businesses will continue to invest in chips over the next three to four years and argues we are only 18 months into the AI boom.
And yet, given earnings have accelerated, valuations aren't looking expensive, in Munro's view.
"Google's (NASDAQ: GOOGL) on 20 times. You're getting all this AI optionality. TSMC (NYSE: TSM) is on 20 times. You get all this AI optionality. NVIDIA (NASDAQ: NVDA) is a bit higher, but it's still not stupidly high," Griffin said.
"If you go through the whole market, you can find all these companies lying in plain sight that have this optionality... The software companies are not at high valuations today. They all have embedded optionality here if they can make and get this technology to work.
"It doesn't just affect tech, it affects every industry on the planet. Every industry on the planet will lean into this technology."
For instance, Munro Partners owns shares in radiology firm Radnet Inc (NASDAQ: RDNT) - the largest provider of outpatient imaging services in the United States.
"They have the largest data set of MRIs in the world. You can use AI on MRIs to help detect cancer quicker, detect it two years earlier, and do it cheaper because radiologists are not required," Griffin explained.
"You just lean into that and you get a straight benefit. Everyone can see it."
Another example would be Axon Enterprise Inc (NASDAQ: AXON) - a US-based provider of technology and weaponry for the military, law enforcement and civilians.
"In Sydney, the police force wear body cameras. They're Axon body cameras," he said.
"It videos the footage, it can then record the footage, plug that into a generative AI model and write the report. The report's not going to come out perfectly, but it's going to save the policemen an hour, two hours of their day. And policemen are hard to find."
Digital twins will also help make a lot of businesses more efficient, Griffin said.
"You used to have to build a wind tunnel to test a car. You don't need to build the wind tunnel anymore. You can do it with the digital twin," he said.
There are so many opportunities out there, he added - and despite the market honing in on the mega-cap tech stocks, they still aren't expensive.
"That reaffirms why I think we're only 18 months into this," Griffin said.
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Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian Group, Your Money, Sky Business and Sky News.
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Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian...
Expertise
Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian...
Expertise
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