""You want to own what I call the picks and shovels of AI," Wood said."
""But it's completely unclear to me who's going to monetize and make money out of all this capex," Wood continued."
""You need two things to do AI: compute and energy," he said."
""The Chinese are far more ahead in energy than the U.S. is ahead in compute.""
The AI capex arms race began in 2023 after Microsoft invested in OpenAI and has funneled most gains to infrastructure providers rather than AI product builders. Semiconductor manufacturers and data-center operators have captured substantial profits, creating a 'picks and shovels' investment thesis. Large, sustained capital spending without clear monetization raises the prospect of an over-investment bust when markets lose patience. Some investors have reduced exposure to richly priced chip stocks after large gains. China may benefit from stronger energy capacity and pragmatic deployment, while U.S. chip export controls since late 2022 have reshaped global technology access.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]