This report assesses the durability of AI growth. The US equity rally is being powered by a single engine — AI — and the mechanics behind this boom are weakening. Beneath the trillion-dollar capex cycle lies a narrow growth model driven by financial recycling, deteriorating economics, and rising obsolescence risk.
Below, we’ve outlined several key takeaways to give you a clear sense of the report’s core themes and findings. Download our full report for in-depth analysis and strategic insights.
Key Highlights
01
A Single Engine Running Hot
The US market’s gains since 2022 are overwhelmingly concentrated in AI infrastructure, with over $20 trillion in added value masking stagnation elsewhere. This dependence has pushed the US to 66% of the MSCI World Index, creating a narrow, overheating growth engine anchored to a trillion-dollar capex supercycle.
02
The Hidden Fragility: Circular Financing and Weak Economics
Much of the sector’s headline demand is driven by circular financing. Cloud giants are funding startups that spend the capital back on compute. Deals like Oracle–OpenAI expose how artificial revenue and thin balance sheets sit beneath the surface. At the same time, margins are compressed by soaring energy costs, weak enterprise monetization, and a global price ceiling set by highly efficient open-source models.
03
The Structural Threat: Obsolescence Risk
Two shifts threaten to strand today’s massive investment wave: the rise of small, efficient language models that pull workloads away from hyperscale data centres, and the pivot toward custom silicon that reduces future demand for merchant GPUs. Together, these trends undermine the long-term returns the current AI infrastructure boom is built on.
Interested to read the full version
The full report also covers:
- The Fuel: The Capital Expenditure Supercycle
- The Squeeze: Unit Economics
- The Headwind: Technological Obsolescence Risk
- The Signal: The “Investment Incentive” Flip
- Investment Implications: Asset Allocation Strategy
