Beyond AI
The technology sector is a dream factory, constantly generating ideas. Part of our role is to disseminate the ideas with durability, and that might make good investments in the long-term. Artificial Intelligence (AI) has rightly commanded a lot of investor attention over the past two years. However, it is far from the only important innovation happening in technology today. These are some of the areas that may prove fertile areas of innovation over the next few years.
Cybersecurity is a theme that we have backed for a long time in ATT. We like technology that solves significant problems, and cyber threats are growing in size and severity, driven in large part by the complex global geopolitical situation and the on-going move to cloud computing. In 2023, there were over 6 billion malware attacks worldwide. Bad actors have increased their ambition, with critical infrastructure, government departments and crucial industries permanently at risk.
Equally, cybercriminals are constantly expanding their toolkit. 2025 saw a range of new threats emerging, including a rise in AI-powered attacks. AI was used for automated phishing, malware generation, and sophisticated social engineering campaigns. Cybersecurity companies have had to develop new solutions to meet these threats, often employing AI.
Properly functioning cybersecurity solutions are now critical for businesses. These will often be multi-layered and are vital in helping companies maintain the trust of stakeholders and swerve costly attacks on their business. This helps maintain a constant source of demand for cybersecurity products. Equally, as companies increasingly digitise and adopt cloud computing solutions, there is even greater need for security solutions to mitigate attacks.
In 2022, Haim Israel, global strategist at the Bank of America said “Quantum computing is a revolution that’s going to be bigger than fire”. Quantum computers use quantum mechanics to solve problems, rather than traditional binary logic. Unlike classical bits, which represent data as 0s or 1s, quantum bits (qubits) can exist in superpositions of both states simultaneously, enabling parallel computation. Computers that use this approach are faster and more powerful. In 2023, Google scientists reported that a quantum computer had completed a computational task that would take a classical supercomputer 47 years to complete
With this in mind, quantum computers could lift many of the restraints associated with technology progress: they could be up to 100 times more energy efficient than a standard supercomputer, for example. Quantum computing could help enable artificial intelligence, allowing the swift processing of data required to generate AI insights.
McKinsey suggests that the market for quantum computing could reach up to £55 billion, while the revolution in computing power will have a £1.5 trillion economic impact on the financial, chemical, life sciences and transport sectors alone. Governments are starting to invest: in the UK, a £140 million National Quantum Computing Centre opened in Oxfordshire last year.
The technology giants are also taking an interest. In December, Google unveiled a new chip, which it believes can solve a problem within five minutes, that would currently take the world's fastest super computers ten septillion – or 10,000,000,000,000,000,000,000,000 years – to complete. On announcing the launch, Google said the new chips "pave the way to a useful, large-scale quantum computer."
Space-enabled technologies are already well-advanced, with satellites driving weather forecasts, GPS systems, and internet technology. The World Economic Forum (WEF) says: “Space technologies are delivering benefits to a wider range of stakeholders, with industries such as retail, consumer goods and lifestyle; food and beverages; supply chains and transport; and disaster mitigation all set to benefit from space innovations.”
Its estimates suggest that the space economy could be worth $1.8 trillion by 2035 as satellite and rocket-enabled technologies become increasingly prevalent. This is a rise from $630 billion in 2023 and represents an average annual growth rate of 9% per annum. The WEF adds: “The number of satellites launched per year, for example, has grown at a rate of 50%, while launch costs have fallen 10-fold over the last 20 years.”
The Internet of Things (IoT) is a series of interconnected smart devices, which are busy monitoring and sharing data all the time. These could be monitoring emissions, weather patterns, energy usage, or a vast range of other metrics. The insights provided by these devices can help companies, governments and individuals perform more efficiently and make better decisions.
The sector is still seeing rapid growth. Fortune Business Insights suggests that it may grow from a market size of $714.5bn in 2024 to $4,062bn by 2032, a growth rate of 24.3% per year. The IoT is necessary to gather the data for AI insights.
The IoT has applications in areas such as supply chain management, mining, freight and agriculture. For example, an IoT-driven blockchain can record the status of shipping containers, temperatures, and position to help shipping companies better manage cargo. For mining companies, it can help prolong the lifespan of expensive machinery, alerting companies to problems at an early stage. It also has a range of consumer applications, including wearable fitness monitors and home appliances. Medical applications, such as blood sugar monitors, are another high growth area.
Cloud computing may feel like old news, but it is still growing fast. Global spending on cloud computing is currently estimated at $679bn, but that is expected to grow to $947bn by 2026. Around 60% of business data is now stored in the cloud and companies increasingly consider it a better, safer solution for their more important data: 94% of businesses noted improvements in their security after moving to the cloud.
Moving workflows to the cloud is likely to become even more important in future. Companies using cloud storage, development tools and applications are in a far better position to align their technology infrastructure with the needs of their business. This is likely to provide a crucial competitive advantage to those using it. It is also likely to become more important because of AI. Companies that have already digitised their business are likely to find AI adoption easier, which could put them two steps ahead of their competitors.
The rise and rise of the Bitcoin price has inevitably attracted attention in 2024. While we have not taken positions on bitcoin or cryptocurrency in ATT, we do not underestimate the potential for it to revolutionise certain industries and financial systems. Blockchain technology provides a decentralised and secure way to record transactions, which can enhance transparency, reduce fraud, and improve efficiency. Cryptocurrencies offer an alternative to traditional financial systems, enabling peer-to-peer transactions without the need for intermediaries.
These technologies are likely to become more mainstream over the next few years. Governments are looking at them more closely. In the UK, for example, the government introduced a Property (Digital Assets etc) Bill in September 2024. This sought to clarify the legal status of crypto assets and provide owners greater legal protection. The Financial Conduct Authority (FCA), the UK’s financial regulator, is also looking at ways to regulate crypto assets without stifling their growth.
For the time being, it is difficult to invest in these assets on public markets. However, as the sector evolves, companies will emerge to take advantage.
A lot of investor attention has been focused on AI infrastructure companies and companies are increasingly adopting AI into their workloads. However, it is also true that many of the real winners from AI may not have emerged yet. The winners from the internet revolution were new businesses that could shape their business models around the internet, rather than sandwiching the internet into existing businesses.
While not all innovation is investable, it may become investable over time, and we need to be alert to opportunities. These are just some of the areas we will be keeping an eye on over the next few years.
