Image source: Getty Images
Jensen Huang visited the UK recently and I think it’s fair to say he liked what he saw. The Nvidia CEO called the country an “incredible, incredible place to invest” and added: “I’m going to invest here.” Good news for UK stocks perhaps?
Huang was referring to Britain’s status in the artificial intelligence race where, thanks to an overflow of research talent and several promising start-ups, the UK has “one of the richest AI communities anywhere on the planet”.
In a meeting with Prime Minister Keir Starmer, he cited “amazing start-ups” like Deepmind, Wayve, Synthesia and ElevenLabs. Deepmind gained fame using neural nets to best South Korean Go supremo Lee Sedol at a game considered one of the final challenges for computers beating humans.
Bringing this round to myself as an investor, should I invest too? Should I ride the wave of British excellence as we enter the artificial intelligence era?
Cold water
I’ll need to pour a little cold water on the excitement here. While Britain’s status as one of the world’s top three or four AI hubs is impressive, the opportunity for investors is minimal. The four previously mentioned start-ups are, much like American ChatGPT creator OpenAI, unlisted companies. Their funding comes from venture capital or private sources, not from the stock markets that Joe Bloggs has access to.
While future IPOs of these promising firms will be worth keeping an eye on, any listing could be years away. So what can we do instead? Well. the same conditions that may cause the UK’s AI ecosystem to thrive are the very same that might cause some larger companies with an AI focus to thrive too. And there are a few hidden AI gems on the London Stock Exchange at this very moment.
Riding the wave
Chief among them, perhaps, is data analytics company RELX (LSE: RELX). RELX is hardly a household name, yet it’s the fifth-largest company on FTSE 100. Its £83bn market cap makes it bigger than Tesco, J Sainsbury and Marks and Spencer put together.
The shares have been riding the AI wave, almost doubling in value between 2023 and 2025. Its products include software to help lawyers parse vast quantities of dense legal data quickly and easily, the type of work well suited for artificial intelligence enhancement. If Jensen Huang is indeed correct about AI’s bright future in the UK then I’d imagine RELX could capitalise.
Looking at the risks, the hype around AI hasn’t translated into outrageous earnings growth yet. In the case of RELX, sales are up around 34% since 2020. That’s excellent growth for such a big company, but it’s not as transformational as some on the hype train are saying AI will be. This common trend in AI stocks could be signs of a bubble. Such uncertainty could be a reason to stay away. But for anyone understanding of the risks with high-growth tech stocks, RELX could be one to consider.
