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7:42Now PlayingBloomberg reporters Silla Brush and Katherine Doherty break down how US derivatives exchange CME Group index provider Silicon Data are teaming up to create a futures market for the computing power that backs artificial intelligence infrastructure.
Brush and Doherty report that a futures market would functionally set a price for computing power and say that the move signals to the rest of the industry that it is set to be a 'serious asset class.'
US derivatives exchange CME Group Inc. and index provider Silicon Data are teaming up to create a futures market for computing power, a key source driving the AI boom.
The futures will help traders, financial firms, AI builders and cloud providers manage volatility and price swings, according to a statement Tuesday. Indexes from market-intelligence firm Silicon Data will help underpin the products. The project is still pending regulatory review.
Computing power, also known as compute, has been in high demand as AI companies use it to power their systems. BlackRock Inc. Chief Executive Officer Larry Fink said last week that a new asset class will likely be buying futures of compute given the shortage and high demand.
Futures contracts give investors the ability to bet on the value of a commodity such as oil or metals at a certain date. They are traded on exchanges such as Chicago-based CME’s, and require a brokerage account that’s approved to trade futures.
“As the backbone of the digital economy, compute is the new oil of the 21st century,” CME CEO Terry Duffy said in the statement. “Every AI model trained, every transaction cleared and every byte of data processed runs on compute, which is becoming a fast-emerging asset class in its own right.”
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