AustralianSuper digs down on AI 'picks and shovels' to ride out global AI upheaval

Sydney, November 3 - Australia's largest pension fund, AustralianSuper, is betting on "picks and shovels" in the artificial intelligence (AI) sector as it navigates market turbulence. Mark Hargraves, the head of the fund's international equities and private equity business, stated that chipmakers and hyperscaler data centres are expected to weather the storm currently engulfing the AI industry.

The comments highlight how AustralianSuper is positioning its AI-linked holdings amid concerns over the sector's earnings justifying its high valuations. The fund has significant exposures to Nvidia, Microsoft, Alphabet, SK Hynix, SpaceX, Meta, Broadcom, and Micron. Hargraves explained that large language models require compute power, which hyperscalers provide through data centres, and that compute power relies on chips.

Despite global AI shares experiencing a decline due to doubts over earnings growth, many fund managers remain optimistic about the sector's long-term prospects.