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We are unashamed, self-confessed AI maximalists and are hugely excited about AI as a strategic, long-term theme. It is a huge priority for technology spending this year and into next, and the current wave of innovation could have a lasting impact on how we live and work. We see developments and opportunities in multiple areas, from improvements in AI as a technology to use in healthcare, from the chip manufacturers to the cybersecurity experts trying to ensure safety around novel tools and their uses. Explore the following chapters for more analysis and opinion on AI, the huge potential it offers and how it is becoming a powerful force for productivity and innovation. You can also read our broader outlook on the technology sector below, as rapid adoption and ever advancing model progress leads us again to take stock of the vast market potential of AI and the steps already taken towards achieving artificial general intelligence.
Artificial Intelligence
2024 was a pivotal year for AI's progress towards AGI
Cybersecurity
Resilience, reinvention and rising risk
Networks
Improving the connections between the building blocks of AI architecture
Semiconductors
At the heart of the AI (r)evolution
Internet
GenAI sparks the next digital shift
AI in Healthcare
AI's huge potential in healthcare led by drug discovery
The Metaverse
First coined in the 1992 cyberpunk novel Snow Crash, the word ‘metaverse’ entered the investment...
Cryptocurrency
2021 was another breakout year for cryptocurrencies, with the total crypto market cap...
Cybercrime incidents continue to grow in both volume and sophistication. Cybersecurity has...
Natural language processing (NLP) remains a key battleground for tech giants fighting for...
Healthcare
On the face of it, healthcare delivered another year of strong absolute growth in 2021...
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Automotive
2021 was a frustrating year for the automotive industry, despite strong demand...
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Artificial intelligence (AI) made major strides in 2024, driven by efforts to match or improve upon OpenAI’s GPT-4, one of the most advanced AI models to date. Companies are consistently pushing the boundaries of what is possible, making AI systems faster, more efficient and increasingly capable of human-like reasoning. Key developments include new techniques that help AI process information more quickly and with fewer resources, allowing it to better understand complex conversations and longer documents. Another trend is multimodal AI, where models are able to process not just text, but also images, audio and video at the same time. While these breakthroughs raise important trade-offs, the overall direction is clear: AI is becoming more general purpose, more powerful and more deeply embedded in how we work, communicate and solve problems. 2024 marked huge developments in computing power as well as how AI models are built and trained. This shift is bringing us closer to AGI (artificial general intelligence), where machines could perform a broad range of tasks as well as or better than humans.
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Semiconductors are playing an increasing role as artificial intelligence (AI) – and their role in it – continues to develop at pace. Its immediate future growth plan depends greatly on the global macroeconomic backdrop, with eyes specifically on the US and China. AI-related chipmakers were the standouts last year, while other areas like industrial and automotive chips remained under pressure. Even within AI, performance was mixed, as investors became more selective. One major theme was the growing interest in custom-designed chips (ASICs) that are tailored for specific tasks, such as those used by Meta Platforms and Google, compared to general-purpose chips from dominant players like NVIDIA. The key global dynamics stretch from Taiwanese chip producers to the growing influence of Chinese manufacturers and the US administration’s push to boost domestic supply. Memory chips, particularly those needed to train and run large AI models, are in strong demand, driving forecasts of continued growth. While the sector remains cyclical and sometimes volatile, long-term trends like AI, automation and edge computing point to a future where semiconductors are more essential than ever. As AI maximalists, we continue to expect rapid progress in AI and continuous development in semiconductors.
Networking
2024 was a standout year for the buildout of AI’s infrastructure and therefore the network companies – those behind the systems that move data between devices, servers and data centres – that are crucial to its success. As AI clusters continue to grow, so does the demand for ever-faster, more efficient movement of data. We also saw – perhaps even underestimated – how important these interconnections are in the performance of AI data centres given the scale of the networks being built there. Within the data centres, hot on the heels of the increase in use of processing units is how to minimise power consumption and therefore operating costs. Increased bandwidth availability is another need added to which – as it is introduced – is the associated need for upgrades to the rest of the network. Networks and networking have come a long way in a relatively short space of time and still have plenty of challenges and opportunities ahead. We look forward to the rest of 2025 and beyond as we tackle emerging trends such as edge computing, understand what they mean for the future and how the AI architecture will need to adapt as a result.
Resilience, reinvention and rising risks
Cybersecurity is a frontline priority in an era of constant digital transformation and escalating cyber threats. The sector is adapting to a new wave of challenges driven by generative AI, deepfakes and increasingly sophisticated ransomware. While the volume of cyberattacks may not have surged dramatically in 2024, their scale, speed and sophistication certainly did. Enterprise security budgets are rising steadily, with global cybersecurity spending expected to exceed $260bn by 2025. However, even as investment grows, adversaries are evolving faster, deploying AI to write malware, create convincing phishing scams and breach systems in record time. As well as being used to breach security, large language models are themselves easy targets – every time technology changes, new vulnerabilities are revealed. The cybersecurity industry then works on ways to thwart these attacks. For investors, cybersecurity continues to offer structural growth, fuelled by innovation and regulatory urgency. The current market leaders will have to work hard to maintain their position as the market changes shape and for us, identifying the right theme is as important as identifying the right investment assets.
The internet sector followed a strong 2023 with a solid 2024 – digital advertising held up well, helped by stable geopolitics and major global events like the football Euros in Germany and the Paris Olympics. Travel and e-commerce also benefited as consumers continued to prioritise experiences and convenience (services over goods). The standout theme of the year was the rapid adoption of generative AI (GenAI). From shopping assistants and chatbots to smarter content recommendations, GenAI is reshaping user experiences and business models across the sector. Major players like Amazon, Meta Platforms and Shopify are embedding AI across their services, driving both efficiency and innovation. We are also seeing the emergence of agentic AI, where AI ‘agents’ act on the user’s behalf, logging into web pages and interacting with them – searching for and making a booking to negotiating prices and completing transactions – with limited, if any (none across parts of the chain), human intervention. This could profoundly change how we interact with the web, shifting power from platforms to AI agents. There are still risks. Regulation, competition and infrastructure costs will all need careful monitoring. Still, with internet use at an all-time high and GenAI unlocking new possibilities, the sector remains one of the most dynamic areas of digital transformation today.
AI’s huge potential in healthcare led by drug discovery
The use of AI in healthcare, particularly to speed up drug discovery and recognise those more likely to progress succeed through clinical trials, is a major hope and will bring huge social, economic and financial change. To date, however, a lack of opportunities, regulatory burdens and limited budgets, among others, mean the investment opportunities have not yet come through as many anticipated. For instance, in the US a large number of AI projects have been cleared by the Food and Drug Administration, but most have specialist, narrow uses not yet integrated into broader systems. AI drug discovery – perhaps the holy grail for AI in the healthcare sector – is seen as a major hope and, while results have largely underwhelmed so far, major players are pressing ahead and applying cutting-edge models. At the same time, progress is more tangible in areas such as robotics where autonomous surgical tasks, including suturing, have already been demonstrated in research settings. AI is also beginning to address productivity challenges in healthcare operations, automating administrative tasks and patient-facing services. While system-wide transformation remains elusive, targeted implementations show promise. Future progress is expected to come from deeper collaborations between technology companies and healthcare specialists, with investors focusing on scalable, platform-level opportunities.
