In today’s rapidly evolving market, investors need to stay on top of the latest trends and themes that fuel growth. In this monthly publication, we offer our market commentary across our themes, covering new opportunities and potential challenges. By providing a deeper understanding of our themes, we aim to help you make more informed investment decisions and achieve your investment goals.
Concreate is a foundational pillar of civilisation and whilst it accounts for around 8% of global emissions, it’s a relatively easy answer for “hard to abate” emissions. That’s because over time concrete reabsorbs the CO2 emitted during production. Furthermore, if manufacturing is completed using heat from carbon free sources and direct air capture technology is used to capture the resulting emissions, concrete production becomes carbon negative! Reducing carbon intensity in the construction industry is one challenge but this can be married with other initiatives to promote circularity. Enter the United Kingdom-based University of Sheffield’s pioneering £GBP 6 million “BuildZero” project. Announced in March, this endeavour seeks to revolutionise the UK’s construction sector towards a circular economy model by striving for zero new material extractions, zero emissions, and zero waste. By adopting a systems-level approach, BuildZero will explore sustainable building practices, focusing on repurposing and retrofitting existing buildings to extend their lifespan, thereby minimising the need for new materials and reducing waste and emissions. The university’s research, spanning across disciplines such as architecture, structural engineering, materials science, and social sciences, aims to develop interactive tools, strategies, and demonstrator projects to realise a sustainable, circular economy in the built environment.1
In March, the Biden administration pledged over $USD 6 billion to kickstart decarbonisation in “difficult to decarbonise” sectors like cement, steel, and chemicals. The funding also has the potential to attract an additional $USD 14 billion in private investments. Heavy industry, which accounts for a third of U.S. emissions, now has a stronger push towards Net Zero, challenging China’s current dominance in clean tech innovation. As part of this funding initiative, a total of 33 projects have been selected to enter cooperative agreements with the Department of Energy’s Office of Clean Energy Demonstrations. These agreements cover a range of stages from engineering design and development to permitting and construction, with a timeline spanning three to seven years. One highlight involves the chemicals and refining sector with 7 projects aimed at transforming “carbon intensity” into an advantage, fostering circularity and securing supply chains for clean fuels and essential components for EVs. These projects focus on upcycling captured carbon, generating high-quality fuels and materials from recycled products, and substituting fossil-fired processes with cleaner ones.2
The Artificial Intelligence (“AI”) revolution could unlock significant productivity gains but realising these will require significant investment in digital infrastructure. McKinsey expects US data centre demand to grow by around 10% a year until 2030, which could well be a conservative estimate. For sustainable infrastructure, data centres have the potential to marry both social and environmental imperatives. Whilst they serve as the backbone for storing, processing, and disseminating data, which in turn can drive economic growth, improve connectivity and promote prosperity, they also require significant amounts of energy. This provides an opportunity to meet these energy requirements by using clean energy. In March, Amazon announced plans to spend over $USD 150 billion over the next 15 years on data centres used to power its cloud computing segment known as Amazon Web Services whilst also adhering to its net-zero carbon goal by 2040. It also announced a $USD 650 million acquisition of Talen, a 960-megawatt data centre campus sitting atop a nuclear power station that provides 63 million kWh per day. This development is also aligned with Amazon’s path to power operations with 100% renewable energy by 2025.3 4
AGCO Corporation, a prominent company in the agricultural machinery and precision agriculture (“ag”) space, announced the launch of PTx, an entirely new brand within its precision ag portfolio. The name “PTx” is rooted in AGCO’s heritage. The “P” stands for precision agriculture and “T” for advanced technologies that multiply (“x”) the impact created farmers through seamless and farmer-centric technologies. For example, data can be collected using field sensors and then analysed to provide actionable insights and control precision equipment directly. Farmers rely on such technology to optimise field-level management regarding planting, fertilising, and harvesting, thereby increasing yields, decreasing waste and maximising their resources. The launch of PTx should drive AGCO’s technology transformation and support the future development and distribution of next-generation ag technologies for farmers and original equipment manufacturers (“OEMs”). PTx will serve farmers around the world through three go-to-market approaches with specialised dealers helping farmers retrofit almost any make or vintage of equipment they already own with the latest technologies. PTx will also expand its relationships with more than 100 OEM partners that can integrate products from the PTx portfolio directly at the factory. 5
Stolen passwords pose a significant threat when they are weaponised by nefarious actors. That’s exactly what Russian state-backed hackers, identified as “Midnight Blizzard,” are seeking to achieve. The group have intensified their cyberattacks on Microsoft Corp, attempting to exploit stolen data to access the company’s source code and internal systems. This alarming development suggests the intrusion is deeper than previously disclosed, as outlined in Microsoft’s recent Securities and Exchange Commission filing and blog post. The group increased password spray attacks tenfold in February, targeting high-value accounts and possibly using information from Microsoft’s emails to map out further attacks. While Microsoft reports no customer-facing systems compromised yet, the same hackers, also known as Cozy Bear or APT29, were responsible for the high profile 2021 SolarWinds cyberattack and have been actively seeking access to various sectors, including aviation and government. The ongoing situation underscores the sophisticated and persistent nature of state-sponsored cybersecurity threats that seek to breach not just single companies but entire supply chains.6
In 2023, the emphasis on Artificial Intelligence (“AI”) in the payment industry markedly rose, with 75% of key payment companies incorporating AI discussions in their earnings calls, a significant increase from 44% in prior years. This trend saw AI mentions skyrocket by 1,170% from the previous year, underscoring a strategic pivot towards AI for operational enhancement. The spotlight was on AI’s utility in fraud detection, customer service improvement, and notably in boosting operational productivity. PayPal, for instance, led in AI mentions, reflecting a broader industry movement towards operational efficiency through AI. Other companies like Mastercard and Visa also highlighted AI in their strategies, particularly focusing on its role in streamlining operations and enhancing service delivery. This growing adoption of AI, especially in operational productivity, presents a robust investment case for payment stocks, suggesting AI’s integration could substantially impact financial outcomes.7 8
Sheffield University, “Study to explore if circular economy can meet needs of UK’s buildings”, March 2024. Available at: https://www.sheffield.ac.uk/news/study-explore-if-circular-economy-can-meet-needs-uks-buildings
IEA, “CO2 Emissions in 2023”, March 2024. Available at: https://www.iea.org/reports/co2-emissions-in-2023
Bloomberg, data as of March 2024
ANS, “Amazon buys nuclear-powered data center from Talen”, March 2024. Available at: https://www.ans.org/news/article-5842/amazon-buys-nuclearpowered-data-center-from-talen/
AGCO, “AGCO Launches PTx, a Precision Ag Portfolio to Accelerate Technology Transformation” March 2024. Available at: https://investors.agcocorp.com/news-releases/news-release-details/agco-launches-ptx-precision-ag-portfolio-accelerate-technology
Bloomberg, “Russian Hackers Are Weaponizing Stolen Microsoft Passwords”, March 2024. Available at:https://www.bloomberg.com/news/articles/2024-03-08/russian-hackers-are-weaponizing-stolen-microsoft-passwords
ARK Big Ideas 2024. Available at: https://europe.ark-funds.com/insights/big-ideas-2024/
FXC Intelligence, “AI in payments: Has artificial intelligence’s time come?”, March 2024. Available at: https://www.fxcintel.com/research/reports/ct-ai-payments-2023-earnings-mentions
Related Documents
Subscribe to ARK Research & Insights
You are leaving europe.ark-funds.com
By clicking below you acknowledge that you are navigating away from europe.ark-funds and will be connected to ark-funds.com. ARK Investment Management LLC manages both web domains. Please take note of ARK’s privacy policy, terms of use, and disclosures that may vary between sites.
United Kingdom
United States
Germany
Italy
Switzerland
Austria
Denmark
Finland
Ireland
Luxembourg
Netherlands
Norway
Spain
Sweden
