We Asked T. Rowe's $8 Billion Tech Manager Why We Are in 1998 — And Why Software Is in Trouble

AI represents a fundamental platform shift characterized by structurally capital-intensive token manufacturing, drawing parallels to the 1998 market correction as a potential buying opportunity. Hyperscalers are accelerating capital expenditure to secure frontier intelligence, with returns on invested capital expected to remain strong as revenue growth scales. While traditional software companies face potential disruption from AI-native agents and models, infrastructure providers and vertically integrated labs like OpenAI and Anthropic are positioned to capture significant value. The current build-out, funded by both equity and debt, reflects a long-term commitment to productivity gains rather than a fleeting bubble. Despite cyclical risks in the semiconductor industry, the persistent demand for compute power suggests that the current investment cycle is only in its early stages, with significant potential for long-term economic expansion and productivity enhancement across the global technology landscape.