The Next Big Theme: October 2023
Artificial intelligence improves drug discovery efficiency, US locks down their lithium supply for the future, and another tech titan enters the generative AI race. Join us in this month’s Next Big Theme as Global X explores recent news and developments in genomics, AI, fintech and more.
Genomics & Artificial Intelligence
Big Pharma Prescribes AI-Powered Drug Discovery
Pharmaceutical companies are increasingly working with artificial intelligence (AI) companies to integrate their technologies. Earlier in the year, Eli Lilly and XtalPi partnered to identify potential drug candidates for clinical and commercial development.1 Last month, Eli Lilly further advanced its AI capabilities within the pharmaceutical sector by collaborating with the clinical trial automation platform, ProofPilot.2 Eli Lilly extended its support by providing the platform access to its cutting-edge sensor cloud technology, known as Magnol.AI, ensuring the secure management of high-frequency sensor data. This partnership marks the first instance of Lilly licensing its technology.3 Similarly, Novo Nordisk is using Valo Health’s AI-powered Opal Computational Platform to combine real-world patient data with human tissue modelling and machine learning.4 This combination can accelerate drug development process by identifying small molecules for novel therapies. Novo Nordisk committed up to US$2.7 billion in payments tied to program achievements, potentially spanning 11 of Valo’s programs.5 Elsewhere in drug discovery, Merck KGaA announced strategic partnerships with Benevolent AI and Exscientia, both of which aim to leverage Merck KGaA’s expertise in oncology and neuroinflammation.6
Explore biotech and genomics with CURE.
Lithium & Electric Vehicles
DOE Fuels Lithium Production
The U.S. Department of Energy (DOE) is in discussions with Lithium Americas about a landmark funding opportunity for the company’s Nevada project. The funding could inject a substantial US$1 billion into the North American lithium industry and potentially cover 50–75% of the construction costs for the Thacker Pass project.7,8 If finalised, this loan would be the largest ever awarded by the DOE to a mining company.9 The U.S. lithium industry has grown considerably under the Biden Administration, which views securing lithium supply chains as vital to its climate goals. Once operational, the Thacker Pass mine could become North America’s primary source of lithium for electric vehicle batteries.10 Previously, General Motors secured exclusive access to the initial production phase by committing to a US$650 million investment in the project.11 In line with this trend to advance lithium projects, Peugeot Citroen Argentina, a subsidiary of auto manufacturer Stellantis, pledged US$90 million to acquire shares in Argentina Lithium & Energy Corp.12
Explore lithium & battery tech with ACDC.
Big Tech & Artificial Intelligence
AI Transformation Intensifies
Amazon is set to invest up to US$4 billion in Anthropic, an AI startup renowned for its Claude chatbot.13 Although smaller in scale than Microsoft’s US$13 billion commitment to OpenAI, this move highlights Amazon’s venture into AI.14 Anthropic’s Claude chatbots, akin to ChatGPT and Google’s Bard, excel in translation, code generation, and answering queries. Claude handles more extensive prompts, making it particularly suited for business and legal documents. In this partnership, Amazon would secure minority ownership and integrate Anthropic’s technology into various products, including the Amazon Bedrock service.15 Google granted select companies early access to Gemini, a conversational AI software designed to compete with OpenAI’s GPT-4.16 Gemini encompasses chatbots and text summarisation through Google Cloud Vertex AI. Meta unveiled its highly anticipated Quest 3 virtual reality headset and a suite of generative AI tools aimed at enhancing user experiences on Facebook and Instagram.17 These tools include image editing, virtual assistants, and AI characters inspired by celebrities. Getty Images collaborated with Nvidia on Generative AI by Getty Images. With it, users can create images from Getty’s vast library of licensed photos, ensuring compliance with copyright regulations.18
Explore US tech titans with FANG.
Emerging Markets E-commerce & FinTech
India’s Digital Commerce Surges
E-commerce in India is projected to be a US$117.3 billion market in 2023 after growing at a compound annual growth rate (CAGR) of 28.2% from US$39.3 billion in 2018.19 The growth is attributable to increased internet and smartphone penetration and a growing consumer preference for online shopping post-pandemic. Government initiatives like the Digital India campaign to enhance online infrastructure and expand Internet connectivity are also major factors. The growth is forecast to continue at a 22.4% CAGR to US$263.6 billion by 2027.20 The FinTech sector is also getting a boost from India’s thriving e-commerce and other emerging markets. With a 58.1% market share in 2023, alternative payment methods such as mobile and digital wallets have supplanted cash and cards as the predominant online payment method in India.21 Also, instant payment systems like India’s UPI and Brazil’s PIX earned global recognition for their contributions to advancing financial inclusion.
Explore emerging markets with NDIA.
CURE: The Global X S&P Biotech ETF (CURE) invests in companies at the fore of healthcare innovation and genomic science, including those involved in gene editing, genomic sequencing, genetic medicine and therapy, computational genomics, and biotechnology.
ACDC: The Global X Battery Tech & Lithium ETF (ACDC) invests in global companies developing electro-chemical storage technology and electric vehicles as well as mining companies producing battery-grade lithium.
FANG: The Global X FANG+ ETF (FANG) invests in 10 companies at the leading edge of next-generation technology that includes household names and newcomers.
NDIA: The Global X India Nifty 50 ETF (NDIA) invests in 50 of the largest companies listed in India.