Summary

• The scale of the AI buildout has been both breathtaking and historic, and in this piece, we explore what is motivating such extreme enthusiasm and what it means for small cap investors.
• AI is the ultimate replacement product: a virtual workforce that can be trained to do many different types of human jobs.
• Foundational technologies are ubiquitous by definition, and AI has already achieved that status.
• The fact that AI is so widely accessible is obviously important, but in our view, AI’s potential as a replacement for human labor is what makes the technology so compelling to investors.

In August of 2023, we published a blog post discussing AI’s enormous potential to drive secular growth, and despite our bullishness at the time, it has managed to exceed our expectations. The scale of the AI buildout