Edge AI: The Next Wave of Artificial Intelligence in the Focus of Investors

The landscape of artificial intelligence (AI) has dramatically changed since the introduction of ChatGPT two years ago. The growing interest in generative AI has led to significant investments in the sector, with cloud-based services being a particular focus. The increasing complexity of models requires larger data centers, and large companies are planning to spend approximately 160 billion dollars next year on acquiring powerful GPUs and other infrastructures. Forecasts suggest that global investments in data centers could even rise to 2 trillion dollars in the coming years. However, due to the enormous costs of AI development and infrastructure, the question arises regarding profitability in comparison to generated revenues. Amidst this dynamic, Edge AI is gaining importance. This technology utilizes AI algorithms directly on end devices like smartphones and PCs, instead of relying on centralized cloud servers. One advantage of Edge AI is the ability to respond in real-time without a fast internet connection, while also maintaining user privacy, as their data remains on the devices. Currently, around 4% of smartphones are equipped with generative AI capabilities, a number that could rise to 50% by 2027. However, the implementation of Edge AI is associated with challenges, as current devices often lack sufficient computing power and storage. Through innovations in the semiconductor sector, such as advanced chip designs, the ability of smartphones and PCs to support large AI models could be significantly enhanced. UBS analysts expect that the combined revenue of smartphones and PCs could exceed 700 billion dollars by 2027. Ultimately, the success of Edge AI depends on compelling applications that motivate consumers to invest in more powerful devices.