Summary

• The capital spending ambitions tied to the AI buildout are so large that the micro is macro.
• Overall revenues could justify the spend – yet it’s unclear how much will accrue to the tech companies driving the buildout.
• The AI builders are leveraging up – investment is front-loaded while revenues are back-loaded.
• Along with highly indebted governments, this creates a more levered financial system vulnerable to shocks – including bond yield spikes.
• With a few mega forces driving markets, allocations made under the guise of diversification may now in fact be big active bets.

Mega forces are clashing, rewiring economies and markets

The Middle East conflict amplifies the “world shaped by supply,” where supply constraints drive economic outcomes. Yet, AI-driven innovation is also at play, making a potential breakout from 2% growth conceivable for the

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