Firms will take a long time to monetize AI: London and Capital

I think in the near term, quite often what you see of investors is they over estimate the possibilities, but actually in the longer term, they tend to underestimate the possibilities And we saw that with.com and the Internet, very similar sort of phenomenon that we’ve seen I think with with AI, it’s going to take a while to monetize and we’ve actually looked through how quickly this can monetize for the amount of capital expenditure that’s gone in and this is going to take some time, there’s no doubt about it. So I agree with you, I think it’s got a little bit ahead of itself, but the areas we’ve set are very much the picks and shovels plays where you’re not actually requiring on this monetization coming in immediately. But over the longer term you’re riding that trend and and and that is stunningly sensible because the two trends you mentioned there.com, stroke, Internet arguably the same thing as well. I don’t know what the percentage is but I would imagine there is a very low percentage of winners compared with number companies we were offered in 99 two thousand as well. Moving on to your point about picks and shovels, ARM Holdings is a great example of picks and shovels as well. It’s a company that is valued at $109 billion of picks and shovels as well. Yeah but it but it it’s providing the platform for others to come and come up with these products. Yes picks and shovels stroke design of I I fully take that point. You’re as a company which is cleaning up in terms of its revenue figure, huge revenue figures, Karen, Karen pointed out that you know we’re we’re looking for a four billion revenue figure this year on 109 billion market cap. We’re still being asked to hold our nose, aren’t we even on picks and shovels, yeah absolutely for some elements of it. I think that’s definitely right. And I think there definitely has been a lot of excitement coming to the market and and and that’s captured a lot of retail investment in in these market areas. I mean it’s probably not surprising. We’ve seen very good figures from Robin Hood overnight in this sort of aspect in in in terms of retail side and I think ARM Holdings in terms of the the IPO of that it went virtually vertical in in terms of its its rise from there. But I think ultimately with that business, it’s a unique part of the infrastructure of chip infrastructure and it’s not just AI chips, chips are across absolutely everything. So I think there is there’s huge potential but has this got ahead of itself very likely but what what what I do, I’m a viewer. I’m an investor. I’ve got loads of money with like all our viewers like you. Yeah. And I’m being asked to rip up my historic valuations for a new technology, which am I am I going to rip up the, the rule book that says I don’t pay more than 10 times sales for a company that and that’s even at a stretch I’m now I’m willing to pay 20 times sales. Yeah, no, I don’t think one has to. I think there is investments around there and investments out there that are unique sort of elements that you can actually get reasonable valuations on. I’m not saying they’re going to be bargain basement. We do. We are a little bit cautious in equities overall and we do think there’s a consolidation period for exact reasons that you’ve mentioned in terms of things that have got a bit ahead of themselves. But if you look at some of these Japanese businesses that are vital inputs into the chip manufacturing process and actually the new technologies of it and the the chip industry used to be incredibly competitive with everybody trying to eat everybody else’s lunch. It’s now changed a little bit actually. You’ve now got businesses that are pretty much duopolies in, in fairly boring areas maybe like silicon et cetera, which have great longer term prospects, great market positions. They might need a little bit of a consolidation for the better entry points. But I think for the longer term there, there are opportunities for investors out there.