Explosion in Investments: Artificial Intelligence and the New Era of Edge AI

The rapid development in the field of artificial intelligence has led to a significant increase in investments in recent years. Particularly in cloud-based AI, operated on powerful data infrastructures, immense capital expenditures are anticipated. Analysts predict that leading companies will invest approximately $160 billion in AI model facilities in the coming year. Globally, investments in data centers could even double to $2 trillion within a few years. However, a central question remains whether the revenues from AI applications will justify the high costs for their development and infrastructure. Meanwhile, a new development is gaining importance: Edge AI. In contrast to centralized cloud technology, Edge AI operates directly on end devices like smartphones and computers, promising faster response times and improved privacy. By 2027, nearly 50% of smartphones could possess generative AI capabilities, a substantial leap from the current 4%. However, there are technical challenges, as many existing devices do not offer the necessary computing power to support large AI models. In the technology world, semiconductor companies are working to increase processing capacities and storage options so that AI models can run on consumer devices. Advances in chip designs are resulting in more powerful processors without needing to shrink circuits. This development opens up new opportunities for investors in the consumer electronics sector as users look to upgrade their devices to benefit from enhanced AI functionalities. UBS analysts estimate that the combined revenue from smartphones and PCs could exceed $700 billion by 2027. Ultimately, the success of Edge AI will depend on the development of engaging applications that offer real added value to consumers.