AI's Role in Asset Management Amidst Climate Change

Welcome to another edition of the Sustainable Intelligence newsletter.

This is where I try to explore the intersection of artificial intelligence and environmental sustainability. My mission is to share my observations across these core themes: AI for Good, Ethical AI, Sustainable AI and AI in Sustainability. I hope to inform, inspire and engage readers interested in the potential of AI to drive positive change for both people and the planet.

Here’s what’s in stock for you today:

• News Bite: Britain cancels $1.7billion of computing projects in setback to its global AI ambitions.

• Deep Dive: AI's Role in Asset Management Amidst Climate Change.

• Tech Trend: The Rise of Advanced AI Video Generation Models Transforming Content Creation and Entertainment

News Bite: Britain cancels $1.7 billion AI projects. A massive setback to AI ambitions

The U.K. once aspired to lead in AI, but recent decisions have dashed those hopes. The government has canceled £1.3 billion ($1.7 billion) in crucial AI projects, undermining the nation's ambitions.

One project, promised by former Prime Minister Rishi Sunak, aimed to enhance the U.K.'s AI infrastructure. Another planned to create a next-generation exascale computer at the University of Edinburgh.

These cancellations represent a significant setback, casting doubt on the U.K.'s future as a leader in artificial intelligence.

Elections have consequences.

Deep Dive: AI's Role in Asset Management Amidst Climate Change

We often get so bogged down by familiar uses of AI like text and video generation that we overlook its critical applications in addressing real-life problems. In my quest to understand how businesses leverage AI to solve significant issues, I discovered AlphaGeo through a Bloomberg Sustainable Business Summit video. This platform's work illuminated how AI benefits asset managers, and I want to share some insights from that discussion.

"Land and real estate are the largest sector of the entire world economy." I wholeheartedly agreed when Parag Khanna, the Founder & CEO of AlphaGeo, stated this at the recent Bloomberg Sustainable Business Summit in Asia. It makes perfect sense, especially in the context of asset managers evaluating their holdings amidst climate volatility, as Parag emphasised.

The impact of climate change on physical assets is profound and far-reaching. From real estate to infrastructure, the financial risks associated with climate volatility are increasing, with natural disasters causing billions of dollars in damages annually. AI's ability to process vast amounts of data and generate localized climate risk assessments is a game-changer for asset managers. For instance, consider data centres being commissioned today to meet AI demand, using localised climate data can inform investors of localised environmental risks inherent in those regions.

AlphaGeo is a geospatial predictive analytics platform that uses AI to help clients downscale climate data to specific geographical coordinates, enabling asset managers to understand the potential impacts on individual properties and regions. This granular insight is crucial for making informed decisions about where to invest, how to protect existing assets, and when to divest from high-risk areas. By leveraging AI, asset managers can move beyond reactive measures and adopt proactive strategies to mitigate climate risks, thus safeguarding their investments and ensuring long-term financial stability.

AI-generated data can also empower asset managers to educate and influence stakeholders, guiding them to make the right decisions about where to invest, how to protect existing assets, and how to divest in light of the daily climate volatility. With accurate climate risk models, investors and policymakers can be better informed, leading to more robust regulatory frameworks and investment practices that prioritize sustainability.

As climate volatility continues to pose significant challenges, integrating AI into asset management practices will be increasingly vital for sustainability and financial resilience.

Tech Trend: The Rise of Advanced AI Video Generation Models Transforming Content Creation and Entertainment

The rapid advancements in video generation models highlight a significant shift in the media and entertainment landscape. With a steady stream of large language models (LLMs) for video generation emerging, such as Vidu, Alibaba's Tora, and Runway's Gen 3 Alpha, it is clear that we are on the cusp of a new era in content creation. These developments indicate that video, as a medium, is evolving in profound ways, driven by the capabilities of AI.

As we continue to watch this space, it is evident that video generation models are not just a technological curiosity but a transformative force in media and entertainment. The implications for content creation, distribution, and consumption are vast, and the industry must adapt to harness the full potential of these innovations.

That’s all I have for you today.

That’s all I have for you in this edition of Sustainable Intelligence.

If you have any questions or feedback please use this form. I will try my best to respond to all your questions and feedback.

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Emeka Ogbonnaya