The Backbone of AI: Why Emerging Markets Matter

And so do you feel like it's fairly concentrated within those two countries or is it more broad based? Are you seeing any emerging signs in other countries?

So obviously, you know, beyond these two countries, China also has a very large value chain on some of the subcomponents of the AI, whether it is optical components, whether it is robotics related components, actuators and many other subcomponents which go into the robotics component.

So whether it is Tesla's humanoid robots, whether it is any other kind of robotic system which is propagated by Nvidia, again, China is playing an important role in that robotic system.

If you go beyond the Taiwan and Korea, the China AI trade is also about the local large language models.

I'm sure people are familiar with DeepSeq and how cheap it is compared to some of the Western large language models like Anthropic or OpenAI.

And China has demonstrated that they can develop their own LLMs.

Alibaba is now developing their own chip as well, which can eventually compete with the Nvidia chips if let's say China is not able to get the advanced AI chips.

So yes, I mean, beyond Taiwan and Korea, China is at the forefront of the AI trade as well.

If you move beyond these three large markets, then the other way to think about the indirect benefits of AI is on the commodities.

And here is where a lot of Latin American markets like Brazil, Peru, Chile, which have large, let's say, copper mining businesses are benefiting from the AI related demand.

And eventually the commodity demand is also being driven by the AI data center CapEx.

In markets like India, we are seeing quite a few small and mid-cap companies which are supplying to, let's say GE, Vernova, Siemens, Mitsubishi, some of these global power equipment related businesses.

And as these companies are supplying the transformers and other electricity related equipment, the value chain is benefiting from the low cost manufacturing countries like India as well.