Three emerging technologies are poised to transform our daily lives. GE Aerospace (GE +1.66%) aims to revolutionize the airplane industry with a radical new engine design, Nvidia (NVDA +1.80%) is leading the charge toward a new generation of more power-efficient and cost-effective data centers that will support artificial intelligence (AI)-led demand, and Tesla (TSLA +3.53%) is changing the way investors perceive the automotive industry.
GE Aerospace and open fan engines
GE Aerospace's joint venture with Safran, CFM International, has a technology program in development named Revolutionary Innovation for Sustainable Engines (RISE). CFM believes that an open fan engine is "the most promising path to achieve a step change in efficiency and durability."
NYSE: GE
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In case you are wondering, here's a look at what the new engines could look like. I've covered the subject of CFM's RISE in a bit more detail previously.
Image source: CFM International.
The main advantage of an open fan engine is its higher bypass ratio, which measures the volume of air flowing around the engine core compared to the air flowing through it. This design significantly improves efficiency, as the cold bypass air generates more thrust than the hot core air. Consequently, using a larger volume of low-velocity cold air is more efficient for producing thrust than relying on a smaller amount of high-velocity hot air.
As such, an open fan engine developed through RISE research could result in a 20% improvement in fuel efficiency and be compatible with sustainable aviation fuels, according to CFM. This would go a long way toward reducing airline costs and helping airline companies meet their emissions goals.
Such an engine could dramatically change the investing landscape, as it could offer significant benefits over rival engines, such as those offered by RTX, and give an edge to aircraft manufacturers that adopt it in their planes (Airbus is currently in pole position and is running tests with CFM), as well as the aftermarket and services market.
Image source: Getty Images.
Nvidia and the next generation of data centers
Booming demand for AI applications is putting stress on data center infrastructure, as well as the power required to support data centers, and even the raw materials necessary to build them. Consequently, Nvidia and its partners are developing the architecture for a new, more efficient, and cost-effective type of data center set to launch in 2027.
The new 800-volt (V) high-voltage direct current (HVDC) data centers will involve a fundamental redesign, which converts 13.8 kV alternating current (AC) into 800 V DC at the perimeter of the data center. Then it is routed to the IT rack, where it's transformed into the lower DC voltages required for the IT rack.
NASDAQ: NVDA
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In comparison, in existing data centers, the power from the grid is stepped down to a lower AC voltage, and then converted to DC voltage within the rack using power supply units (PSU).
The key difference is that existing data centers use low voltage/high current, while new data centers operate at high voltage/low current. This allows them to deliver the same power with less current, improving efficiency, reducing heat, and requiring less copper wiring.
Nvidia believes this will result in a 5% improvement in efficiency, as well as a 70% reduction in maintenance costs, thereby cutting the cost of data center ownership by 30%.
The improvements are significant, which is why shares in partners like Vertiv and Navitas Semiconductor stocks have soared this year. This is why ON Semiconductor stock could be an excellent investment to consider right now.
NASDAQ: TSLA
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Tesla's robotaxis
Traditionally, automakers produced internal combustion engine (ICE) cars for individual owners, who drove them for years. While ICE cars are generally cheaper to purchase than electric vehicles (EVs), they have higher operating and maintenance costs.
The model encourages automakers to maximize margins by continually developing new cars for a price-competitive market. Fuel companies, distributors, and service providers share a significant portion of ICE car expenses, particularly for vehicles that spend a considerable amount of time parked.
Image source: Getty Images.
In contrast, EVs offer low running and maintenance costs, and a larger part of the expenditure on the car is in the up-front costs. These facts mean two things that auto investors need to consider:
- As EV automakers build scale (and Tesla remains by far the leading player in the U.S.), they should be able to cut cost per vehicle, and a cut in the up-front cost of an EV has a much larger impact on its long-term value than the same cut in an ICE car will produce.
- The most economical use of an EV is as a robotaxi, where its low running costs can be best taken advantage of.
It's not just that Tesla's robotaxis (if they prove to be commercially viable) will revolutionize the ride-hailing industry; they will also change the way the auto industry operates and how people perceive transportation.
