Proximity to artificial intelligence is more lucrative than ever. Listed AI software companies trade at 2.5 times the multiple of non-AI ones, according to investor Theory Ventures. Those backed by tech giants are making some of the biggest leaps in market value.

The equity portfolios of AI chip designer Nvidia and Alphabet could be viewed as an insider’s guide to AI. Their 13F regulatory filings, required of all investors with over $100mn in assets, show the public companies the pair invest in. Both have a stake in British semiconductor designer Arm, which Nvidia attempted to buy in 2021 for $40bn and is now valued at $132bn. 

Because it does not design AI-specific chips, there have been some squabbles about Arm’s inclusion in the AI boom. It is one of the more expensive stocks in the sector too, priced at 40 times forecast revenue. That is twice as high as the multiple Nvidia commands. Stakes held by Nvidia and Alphabet offer a counterargument. Both work with Arm and have first hand experience of its value. They know what demand there is for processor designs able to handle large workloads.