How Investors Can Benefit from the Rising Processing Demand of Generative AI
The surge in energy demand attributed to relationalAI is creating opportunities for investors. Owners can capitalize on the increasing need for computing power driven by these technologies by considering investments in data facilities or publicly traded tech companies involved in cooling solutions.
Abhijit Sunil, a senior researcher at Forrester Research, highlighted specific businesses in this sector during an interview on October 20. Publicly traded data center companies such as Equinix, Digital Realty, and Akamai, along with cooling device manufacturers like Vertiv, Schneider Electric, and Lenovo, are well-positioned to benefit from this trend.
Equinix and Vertiv, in particular, stand out due to their significant investments to meet the escalating demand and their established market dominance. These companies demonstrate high potential for internal investment growth based on their development strategies and market positioning.
Angelo Zino, a vice president and top business analyst at CFRA Research, emphasized the concentration of data usage among select companies, suggesting a lucrative opportunity for investors in this space.
While the demand for data centers is evident, the necessity for efficient cooling solutions, such as wet cooling, may not be as apparent. The increasing density of machines performing continuous calculations raises the heat dissipation requirements, making liquid cooling a more effective solution compared to traditional air cooling methods.
According to Brian Lewis, Managing Director at KPMG, liquid cooling offers superior heat dissipation by circulating coolants through heat exchangers, enhancing the overall efficiency of data center operations.
Equinix and Vertiv present compelling investment prospects in both the data center and cooling markets. Equinix, headquartered in Redwood City, California, operates a global network of data centers and leads the colocation data center industry.
Vertiv, based in Westerville, Ohio, specializes in power and cooling management systems for data centers. The company’s strong performance in the liquid cooling market positions it well to capitalize on the expanding opportunities in this sector.
Investors are advised to closely monitor the performance and growth trajectories of Equinix and Vertiv, as these companies are at the forefront of the evolving landscape driven by the increasing demand for processing power and efficient cooling solutions in the age of generative AI technologies.
