LBBW Research sees tech world facing the next super cycle

According to LBBW Research, a new super cycle is on the horizon after desktop internet and the cloud. Artificial intelligence could revolutionize our everyday lives.

Stuttgart, August 1, 2024 - According to LBBW Research, the information technology sector is facing a new super cycle. According to a recent study by digitalization analyst Guido Zimmermann, artificial intelligence (AI) will lead to billions of euros being invested in the development of a new internet infrastructure.

AI is one of the biggest investment hypes in financial history, as the rise of NVIDIA shows. However, AI also offers investors perhaps the greatest opportunities and therefore has the makings of a super cycle

Guido Zimmermann, digitalization analyst at LBBW Research

AI conquers everyday life

Until now, machine learning has been the domain of experts. With the launch of ChatGPT in November 2022, artificial intelligence is now also available to the general public. Zimmermann sees immense, unpredictable effects and speaks of the first phase of the widespread implementation of AI in companies in 2024. In the future, all electrically powered devices could have AI-controlled functions.

Small AI apps instead of centralized super intelligence

For Zimmermann, the question is whether AI is merely a powerful new type of software with many apps or whether software will be completely controlled by AI, as if by a "superintelligence". He believes it is unlikely that large computers or central control units are the future. Instead, he expects AI to initially be integrated into our everyday lives in the form of smaller applications, such as smartphone apps. Communication could also simply take place verbally in the future. Self-learning AI agents that carry out processes independently could also play an important role.

Progress in materials research and healthcare

According to Zimmermann, the progress of AI in materials research and healthcare is particularly promising. Robotics is also making progress driven by AI. Robots could be controlled by generative AI (GenKI) in the future. However, Zimmermann points out that there are still challenges ahead.

Investments in AI infrastructure

The technical development of AI is also interesting for investors. Due to the uncertainty surrounding future business models, a lot is currently being invested in AI infrastructure providers. Zimmermann recommends that small investors invest in broad-based funds. These offer broad participation in the megatrend of digitalization and at the same time reduce the risk through diversified portfolios. However, he warns against exaggerated expectations and refers to the hype surrounding the metaverse, which ultimately fizzled out. In his opinion, virtual worlds in 3D will remain a niche for the foreseeable future.