Hi, I'm Matt Brundage here at Bridgehouse, and I recently had a chance to speak with Louis Florentin-Lee, managing director and portfolio manager at Lazard. I asked him how the Lazard Global Compounders Fund is exposed to what now appears to be a very strong secular growth story of artificial intelligence.
Whilst we do not own currently, or have exposure to those "white-hot", I would call them, AI names like Nvidia or Broadcom or stocks like that, we do have, I think, some very interesting and attractive exposure to AI, ranging from some of the, what I would call the "picks and shovels" companies, maybe not the immediate picks and shovels, but still in that hardware kind of space.
So there, you could think of ASML, TSMC, and the new purchase that we've made in the portfolio that we might touch on later on a Swiss company called VAT group. So that's in the kind of computing power chip technology that will be required in order to fuel the AI revolution.
But if I look back at the, you know, I'm old enough to have been a little whipper snapper, that's an English term, when the during the TMT bubble, and I look back and my conclusion would be that there was a lot of froth and excitement originally in all of the hardware and infrastructure names and the supply, you know, the pipes and all of that, all of those types of businesses.
But over the longer term, the companies that really benefited from the internet boom were the platform businesses, the software companies, the application businesses, the service names, and that's where we have quite a bit of exposure in the portfolio today from an AI perspective as well.
So for example, I'm reasonably confident that in the last twelve months, most of the Fortune 500 CEOs have said to themselves, my god, can someone tell me, is AI going to strengthen our business, or is it gonna make us extinct? And in those scenarios, and like with almost all strategic technology questions that CEOs have, what they tend to do is go to, is go to Accenture to ask for help in that consulting side.
And I think as recently as, Accenture's Capital Markets Day, they reaffirmed their strong commitments and their strength, in AI that they're trying to reinforce. So they've committed to a three billion dollar investment in AI capabilities, which includes expanding the number of GenAI employees that they have from forty thousand to eighty thousand and training for over two hundred and fifty thousand consultants.
They believe that they are really in the early innings for them of AI business and consulting and services that they book and and revenues that they drive from AI. AI's still only around three percent of their total bookings. And when they look across the market, they believe that only ten percent of large enterprises around the world are actually have got in place the data and AI foundations in order for them to to incorporate AI into their business.
So from a service perspective, I think, Accenture is very, very well placed to capture that AI spend over the next decades. From an application perspective, I'll point to a couple of stocks in the portfolio that we own. Both these companies are in the sort of specialist data area. So these are RELX, which is dual-listed in the UK and in the Netherlands. And, they have a significant legal business, so providing data and information to the legal industry.
This actually, at the beginning of last year, when AI exploded onto the scene, actually, you can see here with the down arrow. The market made the initial assessment that, RELX was going to be threatened through AI because it's customer base, it's client base, the legal industry was going to be significantly challenged by AI. And so there was a very big sell-off in the stock in the early part of the year.
I gave enormous credits to our media analyst, Natasha Cardale, who covers both RELX and Walters, who made sure that we didn't panic, not that we ever would, of course, but, really went in and did a deep dive into both companies speaking to divisional management to understand that actually, AI was going to be a big opportunity for them rather than a threat.
So in their legal business, RELX has launched an AI product, which actually learns from their proprietary legal data, not in the case law itself, which isn't proprietary, but in the interpretations of that data. And what became very clear was that, law firms were not prepared, would not be prepared to, risk their reputations, by going to new offers of this AI technology. Hallucinations in the legal space could be extremely costly.
And so what they're seeing is that there is a strong demand for their AI-enhanced product offerings that they are now selling to their client base. So that's one example. And so the stock performed, after a sort of period of strong sell-off, then a quiet period had a very good second half of the year and has continued. Likewise, Wolters Kluwer, again, is a specialist data business.
They provide workflow data and really embedded in the workflow processes of their customers, whether it be in health, legal, tax, regulation, etcetera, etcetera. But the advantages that they can then use to launch revenue-generating AI tools stems from the fact that they have unique data. So drug databases, for example, the Wolters Kluwer. They have accurate data and that means that they reduce the chance of AI misinterpreting information and getting things wrong and those hallucinations.
They also have strong traceability so they can show their clients if they need to how their AI tools are coming to reach certain conclusions, which again gives confidence to their client base. And then there are finally, they're already a trusted partner, with their clients in terms of the workflow solutions that they offer and that they're already installed within their client base. And again, like RELX after an initial strong sell-off, the stock's performed very nicely for us.
So I think that's some examples of where, we are finding good and interesting exposure to AI without necessarily going to the names that everyone knows and have done extraordinarily well already.