Printed Circuit Board

Spoiler alert: this Blog post is not about AI (or not very much). Listen to Equinix – as we did at their biannual capital markets event last week – and the world of technology can be thought of in much more basic terms. As the world’s largest owner of digital independent infrastructure (data centres and interconnections), what Equinix says matters. Founded a quarter of a century ago, Equinix – a portmanteau of ‘equal internet exchange’ – has a presence in 32 countries across 6 continents.

Digital, according to Chuck Meyers, the CEO of Equinix, has “elevated our standard of living” to such an extent that it has to be considered “the most transformational technology.” These are big words and constitute, arguably, a bold claim. Nonetheless, we concur and have argued consistently in our work that technology needs to be thought of as an enabler, a means to enable the efficient allocation of scarce resource across all industries. Equally, we have stated regularly, that data have no value unless stored (where Equinix obviously plays a crucial role), secured and analysed.

Readers may believe that the above is somewhat self-evident, but numbers shared by Equinix in its presentation highlight just how important and enduring this transformation remains. Per figures from IDC, digital transformation is growing eight times the rate of the global economy. In doing so, such transformation is expected to create a $100tr opportunity over the next decade (per the World Economic Forum). It is hard to dispute the assertion made by Chuck Meyers that “large companies must embrace digital or be left behind.”

AI-advocates can rest assured, for artificial intelligence will play a role in this transformation. We think the nuance Equinix added to the debate – “artificial intelligence will continue to be fuelled by human intelligence” is a valid one. Put another way, AI’s outputs are only as good as its inputs and the technology that enables it to function (for more, see our March 2023 piece). AI as a theme will continue to run for decades. Ultimately, it will be everywhere – even if we don’t realise it – but its datasets will still need to be stored and processed in data centres.

27 June 2023

The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Heptagon Capital is an investor in Equinix The author of this piece has no personal direct investment in the business. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.

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Photos taken by the author.

Alex Gunz, Fund Manager


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