AI and the Great Transformation: A Global Investor’s View

Artificial intelligence marks a transition from the capital-light software era to a capital-intensive regime where revenue growth is inextricably linked to massive infrastructure investment. Unlike traditional software, AI requires continuous, large-scale spending on physical components like semiconductors, power, and data centers to meet surging demand. Global equity portfolio manager Dave Eiswert emphasizes that this cycle is driven by a Nash equilibrium, where tech leaders must invest aggressively to avoid competitive obsolescence. Investors should avoid using "AI disruption" as a catch-all alibi for poor performance, instead focusing on identifying companies with genuine relative return improvements. While the hardware supply chain will remain cyclical, the current structural expansion is essential to support the next phase of economic growth. Success requires distinguishing between temporary market noise and the long-term, fundamental shifts in how intelligence is produced and scaled.