Scottish Mortgage Cuts Nvidia Stake Amid Rising AI Adoption Costs
- Scottish Mortgage reduced its exposure to Nvidia due to concerns over high costs linked to AI technology.
- Despite this reduction, Nvidia remains the trust's primary holding as of the latest financial period.
- The adjustments reflect a broader strategic shift towards companies like Meta Platforms, which may offer more sustainable AI integration.
Scottish Mortgage has made significant adjustments to its investment strategy concerning artificial intelligence. In the first half of its financial year, it reduced its stake in Nvidia, a leader in AI semiconductors, despite Nvidia remaining the trust's top holding, representing 6.8% of the portfolio. This decision followed a major increase in Nvidia's share price, which soared over 200% in 2024. Tom Slater, manager of the £14 billion trust, expressed concerns about the sustainability of capital expenditures associated with implementing AI technology. Simultaneously, Scottish Mortgage has increased its investment in Meta Platforms, indicating a shift in focus within its AI ecosystem investments. The company is also dealing with ongoing discussions among its board members and shareholders concerning capital allocation strategies, including potential buybacks versus long-term investments.