August 19, 2024 (MLN): Chakwal Spinning Mills Limited (PSX: CLOUD) has signed a term sheet for an investment of Rs7.784 billion with PNO Capital Limited to launch data center and cloud operations in Pakistan, as part of its push towards artificial intelligence (AI).
Of the total investment, Rs500 million is in the form of equity, subject to an equity injection of Rs400 million from sponsors. The remaining amount of Rs7.284 billion is in the form of a Convertible Bond with a maturity of three years and an annual coupon of 10% (to be adjusted cumulatively at the end of the term).
Moreover, the company has appointed Optimus Capital Management (Private) Limited as its financial advisor.
This investment is part of the company’s strategy to capitalize on the booming technology. The company earlier this month resolved to change its name to "Quantum Cloud & AI Technologies Limited."
Globally, artificial intelligence has been rising on the list of tech trends in recent years. Many industries have seen a rapid increase in business expectations related to AI implementation.
Tech giants such as Amazon.com Inc., Meta Platforms Inc., Microsoft Corp. and Alphabet Inc. have significantly increased their capital spending on artificial intelligence as they rush to capitalize on the booming technology.
According to Bloomberg, companies that the strategists refer to as “hyperscalers” — including Amazon.com Inc., Meta Platforms Inc., Microsoft Corp. and Alphabet Inc. — have utilized about $357 billion for capital expenditure as well as research and development in the past year.
A “significant portion” of this spending was on AI and represents nearly a quarter of the S&P 500’s total for capex and R&D.
