(UBS)
AI will be the most profound innovation and one of the largest investment opportunities in human history
The ratio of monetization potential of the AI application layer to the costs of the enabling and intelligence layers will become a key metric for investment returns
AI will kick off a data center capex cycle that will dwarf general purpose data center capex in the next years
The AI silicon moment: AI chips will capture a large part of the AI value creation
The AI enablers will be the first adopters of AI, driving both revenue and margin upside
Monolithic players will emerge along the AI value chain and over time, the AI market will be dominated by an oligopoly of vertically integrated “AI foundries”
Software will become ubiquitous
Data assets will emerge as the competitive differentiators for AI adopters
Despite the increasing number of new open-source models, proprietary models will remain the top performers
The application and intelligence layers will merge with artificial general intelligence (AGI)
Investment implications
The artificial intelligence market potential is vast, and we estimate that AI value creation could amount to USD 1.16 trillion by 2027. We believe now is the time for investors to size, and seize, the investment opportunity.
- Be sufficiently invested
- Tilt toward the enabling layer
- Don’t cut the winners too soon
- It’s not only about the US
- The AI market potential is vast
For charts and detailed analysis of the opportunities in the AI space, see our latest updated presentation .
For a deeper dive on AI, explore the UBS Chief Investment Office whitepaper - Artificial intelligence: Sizing and seizing the investment opportunity.
