• Digital Trust & Safety firms are now essential infrastructure as platforms prioritize quality and authenticity.
• An AI arms race is fueling demand for advanced solutions to combat sophisticated fake content and verify users.
• The need for digital trust extends beyond social media to e-commerce and finance, creating broad market demand.
• Increasing global regulations and the high cost of security failures create powerful tailwinds for Digital Trust & Safety investing.

The Great Digital Tidy-Up: A Curious Case for Investors

When Less Is More

Let’s be honest, when a company like Meta, whose entire business model is built on having as many eyeballs as possible, decides to voluntarily bin 10 million of its users, you sit up and take notice. It’s like a pub landlord suddenly deciding to turf out a tenth of his regulars for being a bit rowdy. It’s not just housekeeping. To me, it signals a fundamental, and frankly long overdue, shift in the digital world. The mad dash for growth at any cost seems to be giving way to a new, more sober priority: quality.

This isn’t happening in a vacuum. The rise of artificial intelligence has made it ridiculously cheap and easy to create fake profiles, fake news, and fake everything else. The very tools that tech giants use to keep us glued to our screens are now being used to flood their platforms with nonsense. This creates a rather delicious irony. The more advanced the fakes become, the more valuable real, genuine human engagement is. And that, my friends, is where a new breed of company comes into play.

The Unseen Engineers of the Internet

Most investors get distracted by the shiny, consumer-facing brands. But I’ve always found the real action is in the plumbing, the unglamorous but utterly essential infrastructure that nobody sees. The companies providing digital trust and safety are the modern equivalent of the engineers who keep the water running and the lights on. You don’t notice them until something goes horribly wrong.

Firms like Akamai Technologies are a perfect example. You’ve never bought anything from them, but they are the silent guardians protecting websites from attacks that could send them offline in an instant. Then you have companies like Zscaler and CrowdStrike, which focus on securing the cloud and protecting the very systems that platforms use to weed out the fakes. In an age where one hacked administrator account can cause chaos, their services have moved from the ‘nice to have’ column to the ‘absolutely essential’ one.

The Relentless Economics of Trust

Here’s the part that really gets my attention. Spending on digital trust is no longer optional. It has become a non-negotiable cost of doing business online. Think about it. The fines for a data breach can be eye-watering, but the damage to a company’s reputation from a flood of misinformation or scams can be fatal. Platform bosses are finally learning that paying for a strong fence at the top of the cliff is far cheaper than running a hospital at the bottom.

This creates wonderfully ‘sticky’ demand. Once a platform integrates these security and verification tools into its core operations, ripping them out is a risky and expensive nightmare. This perpetual conflict is precisely why I find themes like the Digital Trust & Safety basket so compelling. It’s less about picking a winner in the war between fakers and platforms, and more about considering the suppliers of the digital weapons.

A Word of Caution, Naturally

Now, let’s not get carried away. This isn’t a one way ticket to riches. Like any sector that’s in vogue, many of these stocks are priced for perfection, meaning their valuations already reflect high hopes for the future. A proper economic downturn could certainly see companies tighten their belts, and competition is heating up as everyone tries to get a piece of the pie. Investing always carries risk, and you could lose money.

However, the underlying trends are powerful. The internet isn’t getting any smaller, AI is making the bad guys more sophisticated, and regulators are circling with new rules. This all suggests that the demand for digital trust solutions could be sustained for some time. The great digital spring clean has only just begun, and for investors with a pragmatic eye, the companies selling the mops and buckets might just be worth a closer look.

Deep Dive

Market & Opportunity

• The digital trust and safety market is growing as platforms prioritize authentic engagement over raw user numbers, exemplified by Meta removing 10 million fake accounts.
• The increasing ease of creating fake content with AI is driving demand for verification and security tools.
• Digital trust solutions are becoming essential infrastructure for online platforms, not an optional expense.
• The need for digital trust extends beyond social media to e-commerce, financial services, and dating apps.

Key Companies

• Akamai Technologies, Inc. (AKAM): Provides a content delivery network and security solutions to protect online platforms from cyberattacks.
• Zscaler, Inc. (ZS): Offers cloud-native security through a Zero Trust architecture, securing remote access for platform employees to sensitive systems.
• CrowdStrike Holdings, Inc. (CRWD): Focuses on endpoint security using AI-powered threat detection to protect automated systems that identify harmful content.

Primary Risk Factors

• Many companies in the sector trade at premium valuations, reflecting high growth expectations.
• An economic downturn could lead platforms to reduce spending on these services.
• Competition is increasing, which could put pressure on profit margins over time.

Growth Catalysts

• An ongoing "arms race" between AI-driven fake content creation and AI-powered detection tools benefits the companies selling detection solutions.
• Demand for these services is considered "sticky," leading to high customer retention and predictable revenue.
• Global regulations, such as the EU's Digital Services Act, are creating new business opportunities for companies that help platforms meet compliance requirements.

Investment Access

• The Digital Trust & Safety basket is available on the Nemo platform.
• Investors can access the theme through fractional shares, with investments starting from $1.
• All investments carry risk and you may lose money.