The Next Big Theme: October 2024

The US Army renews defence tech contracts, artificial intelligence continues to excite the IPO market, and big tech goes big nuclear power. Join us for this month’s “Next Big Theme” as we explore recent news and developments in defence tech, artificial intelligence, battery technology, and more.


Defence Technology

Drone Systems Gain Further Momentum, Signalling Shift in Modern Warfare Tactics

US drone supplier AeroVironment inked a $1 billion contract with the US Army to supply its Switchblade loitering munitions for infantry battalions.1 Switchblade drones combine surveillance capabilities like any other drone but can also be used as guided missiles capable of destroying tanks, light armoured vehicles, hardened targets, and enemy personnel. The US Army has used Switchblades for over a decade, and their effective deployment by Ukrainian forces has highlighted their broader strategic utility and favourable economics for a less financially resourced military. The United Kingdom is the only other current Switchblade operator, but countries such as like France, Lithuania, and Australia have all signed deals to buy the system since war began in Ukraine.2 Combined, these developments demonstrate how mature and effective drone systems have become and how this market is reshaping warfare.

Explore Defence Technology with DTEC.


Artificial Intelligence

AI Excitement Heads to the IPO Market

Cerebras Systems, which designs and produces semiconductors, supercomputers, and provides additional AI and software services, filed with the US Securities and Exchange Commission to test the public markets. The initial public offering (IPO), which will be the first for a generative AI company, is possible later this year.3 Cerebras differs from most AI chip companies today by taking a Wafer Scale Engine (WSE) approach to AI computing. In a typical chip manufacturing process, a wafer is sliced into multiple smaller chips, acting as an independent processor. Conversely, the WSE approach uses an entire wafer as a single, integrated processing unit. The WSE approach aims to overcome the limitations of conventional chip scaling, with the WSE’s larger size offering potential advantages for AI workloads such as increased parallelism, reduced latency, and memory proximity. The WSE approach gives Cerebras a compelling value proposition for both the training and inference markets. In our view, it has the potential to bring a unique AI hardware play to the market.

Explore Artificial Intelligence with GXAI.


Lithium & Battery Technology

US Battery Manufacturing Supply Chain Receives a Boost From Government Investments

The Department of Energy (DOE) announced over $3 billion in funding through the Infrastructure Investment and Jobs Act (IIJA) to spur the domestic production of advanced batteries and battery materials. In total, the DOE announced funding for 25 projects across 14 states, covering the entire battery manufacturing supply chain, from sourcing and processing critical minerals like lithium, graphite, and manganese to building and recycling batteries.4 Two of the largest grants, up to $225 million each, are for projects extracting lithium from brine. Among these is a joint partnership between Standard Lithium and Equinor that is expected to produce up to 45,000 metric tons of battery-quality lithium carbonate over two decades.5 With batteries essential for renewable energy grids and the electrification of the transportation industry, this funding could help the US expand its role in global battery production.

Explore Lithium & Battery Tech with ACDC.


Nuclear Power

Nuclear Power Gets a Vote of Confidence with Three Miles Island Reopening

Constellation Energy plans to restart the Three Mile Island nuclear plant by 2028, subject to Nuclear Regulatory Commission approval. Constellation, which will invest $1.6 billion to extend the plant’s operations potentially until 2054, signed a 20-year power purchase agreement (PPA) with Microsoft, Constellation’s largest ever PPA.6 Microsoft’s interest reflects a broader trend of tech companies turning to nuclear energy to meet rising electricity needs while adhering to sustainability goals. Microsoft aims to use the plant’s carbon-free electricity to support its growing data centre operations, driven by the increasing demands of AI.7 After decades of nuclear plant shutdowns, Three Mile Island’s restart is significant because it signals a revival of nuclear power, a clean and reliable energy source. Increasing demand from sectors like tech and electric vehicles has nuclear energy becoming essential to balance the energy grid and meet future demands. With bipartisan political support, it appears the nuclear energy market has a growing opportunity to achieve those goals.

Explore Nuclear Power with ATOM.


Related Funds

DTEC: The Global X Defence Tech ETF (ASX: DTEC) invests in companies at the forefront of defence innovation, including AI, drones, and cybersecurity – all crucial components in today’s modern defence landscape.

GXAI: The Global X Artificial Intelligence ETF (ASX: GXAI) invests in global companies involved in AI development, AI-as-a-service, provide AI compute power, or design and manufacture AI hardware.

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.

ATOM: The Global X Uranium ETF (ASX: ATOM) invests in a broad range of companies involved in uranium mining and the production of nuclear components, including those in extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries.