Pickaxes & Pixie Dust: AI’s Support Crew

by

Right then. Everyone’s terribly excited about OpenAI, naturally. All flashing lights and pronouncements about the Singularity. A perfectly good company, I’m sure, if you have a spare continent to power the servers and a deep fondness for burning through cash at a rate that would make a dragon blush. They’re aiming for the stars, bless them, but someone has to build the ladders. And that, my friends, is where the sensible money is made.

Forget chasing the lightning. We’re looking at the folk who supply the conductors, the insulators, and, crucially, the very sturdy boots to avoid being electrocuted. The AI gold rush is on, and the real profits won’t be dug from the digital earth by the glamorous prospectors, but by those quietly selling the pickaxes and, shall we say, the enchanted shovels. We’re not talking about owning the magic, merely facilitating it. There’s a comfort in that, a certain… durability.

So, let’s bypass the hype and examine three companies that aren’t promising to be the AI, but rather to keep it running. Astera Labs, Iren, and Nokia. They may not get the magazine covers, but they will be quietly funding my retirement.1

Astera Labs: The Data Sherpas

AI, you see, isn’t about thinking. It’s about moving an absolutely terrifying amount of information around. Mountains of data, really. Think of it as a very large, very demanding postal service. Astera Labs doesn’t create the letters, it builds the incredibly efficient, magically-assisted railway system to deliver them. They specialize in connectivity within data centers – those vast, humming cathedrals of computation that are rapidly becoming the dominant feature of the landscape.2

These aren’t your grandfather’s server farms, mind you. We’re talking facilities the size of small cities, consuming enough power to make a small country reconsider its energy policy. And within those digital metropolises, data needs to flow. Quickly. Reliably. Without getting lost or, worse, misinterpreted. Astera’s hardware and software are designed to accelerate that flow, boosting speed, efficiency, and preventing those pesky data bottlenecks. They’re essentially digital traffic controllers, ensuring the smooth operation of the entire system.

Unsurprisingly, demand is soaring. Their recent quarterly revenue jumped an impressive 104% year-over-year, hitting $230.6 million. And they’re projecting even stronger sales for the next quarter. That’s not just growth; that’s a stampede.

Loading widget...

Iren: Powering the Digital Divination

Iren began life as a Bitcoin miner, which, let’s be honest, is a bit like starting a business selling bottled air. However, they built up a significant infrastructure – GPU-heavy data centers powered by renewable energy – and had the good sense to pivot. Now, they’re renting out their cloud computing capacity to hyperscalers – those enormous companies that are desperately trying to harness the power of AI.

Microsoft recently signed a five-year deal with Iren worth a staggering $9.7 billion. That’s a lot of digital runes being cast, and Iren is providing the electricity to make it happen. But the real strength of Iren lies in its vertical integration. They don’t just own the hardware and data centers; they own the electrical infrastructure and power-generating systems that keep everything running. This gives them a significant cost advantage and allows them to expand rapidly to meet the growing demand for AI processing power.

Their recent quarterly revenue increased by a remarkable 355% year-over-year, reaching $240.3 million. And they’re actually profitable, with a net income of $384.6 million. That’s the sound of sensible business practices, my friends. A rare and beautiful sound indeed.

Loading widget...

Nokia: The Wireless Whispers

Nokia, you may recall, used to be primarily known for making mobile phones. A long and winding road, but they’ve successfully reinvented themselves as a key player in the AI revolution. They’re focused on delivering artificial intelligence to edge networks – those decentralized computing resources that are located closer to the source of data.

They’re also developing 6G wireless technology, which promises to be significantly faster and more capable than the current 5G networks. This will be crucial for supporting the massive data volumes required by AI applications, particularly those involving agentic AI and systems that interact directly with the physical world, such as robots and self-driving cars. Imagine a world where your toaster can argue with you about the optimal browning level. That future is being built on Nokia’s infrastructure.

AI tailwinds are already driving growth, with sales increasing by 12% in the recent quarter to 4.8 billion euros. They’ve also diversified beyond their traditional reliance on telecom operators, providing their technology to AI data centers. This has led to a 114% year-over-year increase in optical networking segment sales, reaching 782 million euros.

Loading widget...

Astera Labs, Iren, and Nokia may not be household names, and they certainly won’t be gracing the covers of glossy magazines anytime soon. But as suppliers of the technology that underpins artificial intelligence systems, they are well-positioned to sustain their sales growth in the coming years. And that, my friends, is where the sensible money is made.3

  1. Disclaimer: I am an investor, and my opinions are subject to change based on market conditions and the whims of particularly opinionated gnomes.
  2. These data centers are, naturally, guarded by highly trained squirrels. It’s a surprisingly effective security measure.
  3. And remember, a wise investor always keeps a spare enchanted shovel on hand. You never know when you might need to dig yourself out of a tricky situation.

Read More

2026-01-22 20:22