The Next Big Theme: September 2024

Artificial intelligence starts to make real money, computer chips get cheaper as competition rises, and ride share firms now want cars to drive themselves. Join us in this month’s “Next Big Theme” as we explore recent news and developments in artificial intelligence, semiconductors, autonomous vehicles, and more.


Artificial Intelligence

AI Monetisation Surge Fuels Rising Startup Valuations

OpenAI is reportedly in talks to raise a funding round that values the company at over $100 billion.1 Earlier this year, OpenAI’s valuation jumped to over $80 billion, significantly higher than its $29 billion valuation from last year.2 This news follows OpenAI announcing that it is on track for $3.4 billion in annualised revenue for 2024, more than double the $1.6 billion it reported in late 2023.3 The company has been focusing on increasing revenue from enterprise customers by offering AI services, including access to its models through Microsoft Azure, which is expected to generate $200 million.4 OpenAI also announced the launch of SearchGPT, a prototype search engine designed to deliver fast, relevant answers with clear sources. Condé Nast, one of the first enterprise customers of the new prototype, will now display content from outlets like Vogue, The New Yorker, Condé Nast Traveler, and GQ through SearchGPT.5

Access Artificial Intelligence with GXAI.


Biotech

Obesity Drugs Show Promising Results in Preventing Diabetes and Treating Other Conditions

The positive momentum continued for obesity drugs, as Eli Lilly recently reported clinical trial data in which its obesity drug, Zepbound, cut the risk of pre-diabetics progressing to diabetes by 94% compared to placebo.6 Called SURMOUNT-1, the trial tested tirzepatide treatment in adults considered to be pre-diabetic and obese or overweight. Adults who received the highest dose of tirzepatide, 15 milligrams, lost about 23% of their body weight on average over three years, significantly more than the average 2% lost by those on placebo.7 Lilly also released data that supports tirzepatide’s use beyond diabetes and weight loss, including for sleep apnea and heart failure. Zepbound is expected to report $22.3 billion in 2030 sales. The same medication but for type 2 diabetes, Mounjaro, is expected to total $22.7 billion in 2030 sales.8

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Semiconductors

AI PC Chip Competition Intensifies

Qualcomm and Intel are accelerating their efforts to capture the growing demand for AI-integrated devices and reshape the future of personal computing. Qualcomm introduced its Snapdragon X Plus 8-core processor, targeting PCs priced as low as $700 to expand its semiconductors to more devices.9 Traditionally focused on smartphone chips, Qualcomm is expanding its presence in the PC market to compete with companies like Intel. The new Snapdragon X series, designed for PCs running Microsoft’s Windows operating system, offers powerful AI capabilities while maintaining long battery life, making it suitable for a wide range of AI-driven applications.10 Qualcomm’s push follows Microsoft’s launch of Copilot + PCs, which rely on Qualcomm’s chips to manage on-device AI tasks. Intel also recently unveiled its Core Ultra 200V series, also built to power AI functionalities on PCs with better battery life.11 Intel’s chips are expected to be made available in September 2024.12

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Autonomous & Electric Vehicles

Uber Partners with AI Startup Wayve and Cruise to Drive Autonomous Vehicle Innovation

Uber and AI startup Wayve, which aims to develop a general purpose driving AI system for any vehicle worldwide, announced a partnership to advance autonomous driving technology. As part of the deal, Uber will fund Wayve in return for a minority stake.13 Wayve’s AV2.0 technology, which enables vehicles to autonomously navigate by using data from their physical environment, offers automakers the ability to enhance existing vehicles with advanced driver assistance systems and fully automated driving capabilities. For Uber, integrating Wayve’s AI solutions could fast-track the rollout of self-driving vehicles on its platform. Uber also entered a multiyear partnership to bring Cruise, GM’s self-driving car company, to the Uber platform.14 Once launched, Uber riders will have the option to select a Cruise AV.15 Both partnerships further solidify the auto industry’s shift toward shared, electric, and autonomous mobility, positioning Uber as a key player in the future of transportation.

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Hydrogen

European Commission Approved Green Hydrogen Support Schemes for the Netherlands and Spain

The European Commission approved a €998 million ($1.09 billion) financial support scheme for the Netherlands to produce renewable hydrogen. The scheme will support the construction of at least 200 megawatts (MW) of electrolysis capacity and contribute to the Netherlands’ efforts to grow its electrolyser capacity to 500 MW in 2025 and to 3–4 gigawatts (GW) by 2030. It will also support the EU’s ambitions to install at least 6 GW of renewable hydrogen electrolysers by 2024 and at least 40 GW by 2030. Eligible projects could have as much as 80% of costs covered by grants, and projects could receive a premium for up to 10 years.16 The bidding process is expected to conclude by year-end. The European Commission also approved a €1.2 billion ($1.3 billion) financial support package for renewable hydrogen projects in Spain. The new support scheme could support up to 100 MW of installed electrolyser capacity. Qualified investments include the production of renewable energy-derived electricity, the production of renewable hydrogen-derived fuels, and renewable hydrogen storage.17

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Related Funds

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.

CURE: The Global X S&P Biotech ETF (ASX: 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.

SEMI: The Global X Semiconductor ETF (ASX: SEMI) invests in leading companies along the semiconductor value chain including designers, technology developers and manufacturers.

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.

HGEN: The Global X Hydrogen ETF (ASX: HGEN) invests in companies involved in hydrogen production, the integration of hydrogen into energy systems, the development or manufacturing of hydrogen fuel cells, electrolysers, and other technologies related to the use of hydrogen as an energy source.