What are AI data centers and why are they important?

AI data centers are specialized facilities filled with thousands of powerful computers that train and run artificial intelligence models. They're much more powerful than regular data centers because AI requires massive computing power. Meta is investing hundreds of billions to build these facilities because they're essential for developing more advanced AI. Companies that provide the hardware, chips, and power systems for these centers stand to benefit significantly from this expansion.

Why is Meta investing so much in AI infrastructure?

Meta (the company behind Facebook and Instagram) is investing heavily in AI to remain competitive in the technology industry. They're building massive data centers like "Prometheus" to develop more powerful AI systems that could eventually reach superintelligence - AI that surpasses human capabilities. This investment helps Meta improve their products, create new AI features, and ensure they don't fall behind competitors like Google and Microsoft in the race to develop advanced AI.

What does "picks and shovels" mean in investing?

The term "picks and shovels" refers to an investment strategy inspired by the Gold Rush, where the most reliable profits went not to gold miners themselves, but to the businesses selling essential tools (picks and shovels). In modern investing, it means focusing on companies that provide essential tools, components, or infrastructure that enable a broader trend - in this case, the AI boom. Rather than betting on which AI company will win, you're investing in the suppliers that all AI companies need, potentially reducing risk while still gaining exposure to the growing sector.

Why include utility companies in an AI-focused investment theme?

Utility companies are a crucial but often overlooked part of the AI infrastructure equation. Advanced AI data centers consume enormous amounts of electricity - sometimes requiring multi-gigawatt power supplies (equivalent to powering small cities). As Meta and other tech giants build massive AI facilities, utility companies that provide this power will see significant demand growth. Additionally, tech companies increasingly seek clean energy sources for their operations, creating opportunities for utilities with renewable energy offerings.

What are GPUs and why are they important for AI?

GPUs (Graphics Processing Units) were originally designed to render video game graphics, but they've become essential for AI development because of their ability to perform many calculations simultaneously. This parallel processing is perfect for training AI models, which involve millions of mathematical operations. Companies like NVIDIA and AMD that design these specialized chips are central to the AI boom. As Meta and others build more AI data centers, they need hundreds of thousands of these powerful processors, creating massive demand for GPU manufacturers.

16 handpicked stocks

Meta's AI Engine

This carefully selected group of stocks represents the companies building the backbone of AI's future. Our professional analysts have identified the key suppliers providing everything from advanced chips to power infrastructure that Meta needs for its massive AI data center expansion.

Han Tan | Market Analyst

Updated 2 days ago | Published at juillet 15