Summary

• AI may be approaching an inflection point in its buildout; we see parallels to the early internet and electrification eras, when infrastructure buildouts followed initial hype cycles.
• Scaling AI requires physical inputs; compute, energy, data centers, and automation are the binding constraints on AI growth.
• Infrastructure may capture more durable value; scarcity, pricing power, and high barriers favor the physical layers over applications.

The AI investment opportunity is shifting from software to physical infrastructure. Semiconductors, data centers, energy, and automation are where durable value may be building.

Is the Market Still Thinking About AI Like a Software Story?

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