The overlooked insight here is that while AI and data centers are grabbing the headlines, the real constraint in this buildout isn’t technology—it’s resources. The market continues to price AI like it’s software: infinite scalability, low marginal cost, perpetual growth. But the physical world has limits—land, energy, water, even regulatory bandwidth. We’re about to find out how hard it is to pour trillions into capex without tripping over those limits.
The risk isn’t that AI growth stops. It’s that the capital cycle shifts—AI demand stays high, but resource scarcity drives bottlenecks and cost overruns. That’s where patient capital can play: finding those underappreciated infrastructure and resource bets, the literal inputs that make this whole thing possible.
I totally agree. For now, we're seeing strong investment in AI, but until they reach that break-even point and profitability continues to rise, the hype will die down.
This is like the California Gold Rush... Better to focus on the shovels.
The hidden diamond in Data Center:
The Recurring Business of Shared Cloud Responsibilities.
The overlooked insight here is that while AI and data centers are grabbing the headlines, the real constraint in this buildout isn’t technology—it’s resources. The market continues to price AI like it’s software: infinite scalability, low marginal cost, perpetual growth. But the physical world has limits—land, energy, water, even regulatory bandwidth. We’re about to find out how hard it is to pour trillions into capex without tripping over those limits.
The risk isn’t that AI growth stops. It’s that the capital cycle shifts—AI demand stays high, but resource scarcity drives bottlenecks and cost overruns. That’s where patient capital can play: finding those underappreciated infrastructure and resource bets, the literal inputs that make this whole thing possible.
I totally agree. For now, we're seeing strong investment in AI, but until they reach that break-even point and profitability continues to rise, the hype will die down.
This is like the California Gold Rush... Better to focus on the shovels.
When three is a war, Data Center will be the target to paralyse the economy.