The Rise of Edge AI: The Future of the Consumer Market?

The world of artificial intelligence (AI) is experiencing a rapid increase in significance and application possibilities, triggered by public debate about ChatGPT two years ago. The rapid technological progress is leading to significant investments in cloud-based AI, where large data infrastructures are necessary. This development is driving companies to develop advanced data centers to meet the growing demand for high-performance GPUs and infrastructures. Forecasts suggest that investments in data centers worldwide could grow to as much as two trillion US dollars within a few years. However, doubts remain whether the revenues generated from AI applications can justify the high development costs. A promising trend emerging is edge AI. This innovation allows AI algorithms to run directly on personal devices like smartphones, providing fast response times and better privacy. Analysts predict that by 2027, almost 50% of smartphones will have generative AI capabilities, a significant increase from the current 4%. Nevertheless, the technical limitations of current devices pose a challenge. As technology evolves, major semiconductor manufacturers are bringing advanced chip designs to the market, offering more performance without miniaturization. This development could lead to an increase in sales of smartphones and PCs as consumers upgrade their devices to take advantage of improved AI functions. Estimates from UBS analysts predict a combined revenue of over 700 billion US dollars for smartphones and PCs by 2027. However, the success of edge AI will depend on the development of compelling applications that consumers find worthwhile. While Exscientia plc (EXAI) ranks 35th on the current list of emerging AI stocks, investor interest in other AI stocks with greater return potential remains strong. For investors seeking high-yield alternatives, a report on the most affordable AI stocks is available.