The Next Big Theme: January 2024

Electric vehicle manufacturers duel for leadership, artificial intelligence comes at the touch of a button, and the return of the Metaverse. Join us in our first “Next Big Theme” of 2024 as we explore recent news and developments in EVs, virtual reality, cloud computing, and more.

Electric Vehicles

Carmakers Ready to Electrify 2024

Strong 2023 sales from Tesla and BYD along with breakthroughs from Honda in early 2024 set the tone for another promising year for the electric vehicle (EV) sector. Tesla delivered a robust 1.8 million vehicles in 2023 and BYD continued its ascent by delivering 1.5 million, including a record 526,409 in Q4 2023.1 At the 2024 Consumer Electronics Show (CES), Honda made a significant splash with the unveiling of its innovative 0 Series, including the Saloon sedan and Space-Hub minivan, scheduled for a North American launch in 2026.2 This series represents Honda’s pivot to in-house EV development and features advancements such as e-axles, steer-by-wire systems, and over 300 miles of range per charge.3 Potentially adding to the impact of milestones like these is a revision to U.S. policy that introduces enhanced tax credits, including instant rebates to facilitate easier consumer access to EVs.4 This legislative shift is anticipated to catalyse further growth in the EV market.

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Artificial Intelligence

AI Makes its Way to the Keyboard

Microsoft is redefining the relationship between artificial intelligence (AI) and personal computing by introducing a dedicated Copilot key on Windows 11 laptops.5 This key, which replaces the Menu key, provides users with direct access to Microsoft’s Copilot AI service, highlighting the company’s deep integration of AI, from its Azure servers to individual PCs. Google introduced an advanced version of its Bard AI service, expected to be available through a paid subscription to Google One.6 Powered by the cutting-edge large language model Gemini Ultra, Bard Advanced is a significant upgrade over the current Gemini Pro version.7 Notably, it offers advanced math and reasoning skills. Other recent AI innovations from Google include a feature codenamed Motoko, which might allow users to create custom bots, and a “power up” feature that augments user prompts in Bard. Additionally, a new “tasks” tab and customisable backgrounds for Bard prompts may be forthcoming. Features like these highlight the evolution of AI services in an increasingly competitive market.

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Big Tech & Metaverse

Mixed Reality Aims for Accessibility

Qualcomm announced its Snapdragon XR2+ Gen 2 chip, which will be used in Samsung and Google’s forthcoming mixed reality (MR) devices.8 The Snapdragon XR2+ Gen 2, an evolved version of the XR2 Gen 2 chip used in Meta’s Quest 3, offers advanced features like 4.3K resolution, a major leap forward in XR productivity and immersive entertainment.9 The chip can support Android applications, which suggests the devices may be offered at a more accessible price point than Apple’s $3,499 Vision Pro headset.10 In response to these new market dynamics, Meta reduced the price of its Quest 2 virtual reality (VR) headset to $250.11 This pricing strategy extends to the 128GB and 256GB models, including refurbished units and accessories.12 With its already favourable initial launch price, the Quest 2’s new price point may solidify its appeal to VR newcomers, bolstered by a vast array of VR titles.

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Disruptive Materials

Copper and Zinc Exploration Updates

Disruptive technologies require metals, and recent developments illustrate the continued demand for zinc, copper, and other metals. Canada’s Barrick Gold and Chile’s Antofagasta formed Minera El Encierro, a joint venture for copper and metal exploration in Chile’s Atacama region.13 The initiative involves a $95 million investment to set up 60 drilling platforms across 9,400 hectares. Expected to last five years, the project aims to explore an area with promising copper-gold-molybdenum porphyry deposits, only 15% of which has been drilled.14 Barrick Gold is also looking to expand its copper production through investments in Pakistan’s Reko Diq mine and Zambia’s Lumwana super pit.15 The company wants to double its copper output by 2031. Also, the company is considering an acquisition of First Quantum, which recently closed its flagship mine in Panama.16 Following a pause due to low zinc prices, Sweden’s Boliden AB is negotiating to restart its Tara zinc operation in Ireland this year.17 Also, Boliden is increasing production capacity at its Odda zinc smelter in Norway.18 In Canada, Amarc Resources, in partnership with Boliden Mineral Canada, is planning a major drilling program expansion at the DUKE Copper-Gold District in British Columbia for 2024.19

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Data Centres & Cloud Computing

Enterprises Set to Benefit from Hybrid Cloud Partnerships

IBM is partnering with American Tower to accelerate the deployment of hybrid, multi-cloud computing at the edge, enhancing cloud capabilities in IBM’s Access Edge Data Centres. A leader in communications real estate with a vast network of data centres, American Tower will integrate IBM’s hybrid cloud platform and automated systems to create an edge cloud across its locations.20 This initiative aims to provide enterprises with flexible application deployment options, enabling faster, more secure data processing near the data source. Cirrascale Cloud Services announced a partnership with Qualcomm to incorporate the Qualcomm Cloud AI 100 into its AI Innovation Cloud.21 This AI inference accelerator is tailored for generative AI, large language models (LLMs), and computer vision applications, a significant advancement in cloud-based AI processing. Qualcomm’s introduction of the Cloud AI 100 further strengthens its position in the AI inference market. This move aligns with Qualcomm’s strategy to expand into the AI-enabled edge market.

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Related Funds

ACDC: The Global X Battery Tech & Lithium ETF (ASX: ACDC) invests in global companies developing electro-chemical storage technology and electric vehicles as well as mining companies producing battery-grade lithium.

ROBO: The Global X ROBO Global Robotics & Automation ETF (ASX: ROBO) invests in robotics and artificial intelligence companies, including those involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles.

FANG: The Global X FANG+ ETF (ASX: FANG) invests in 10 companies at the leading edge of next-generation technology that includes household names and newcomers.

GMTL: The Global X Green Metal Miners ETF (ASX: GMTL) invests in global companies which produce critical metals for clean energy infrastructure and technologies, including lithium, copper, nickel, and cobalt.

TECH: The Global X Morningstar Global Technology ETF (ASX: TECH) invests in companies whose principal business is in offering Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Infrastructure-as-a-Service (IaaS), and/or cloud and edge computing infrastructure and hardware