Sustainability of the Current Tech Cycle

This report examines the sustainability of the AI-driven technology cycle, arguing that supply scarcity and structural shifts toward inference demand justify elevated capital expenditure.

Key Takeaways

• 1.AI capex remains high due to hyperscalers' need for first-mover advantage and the risk of losing strategic ground.
• 2.Supply scarcity and the ability to deliver at speed and scale are the primary determinants of winners in the current cycle.
• 3.Efficiency improvements in AI models historically stimulate higher token demand rather than reducing hardware needs.

Table of Contents

• Executive Summary
• Is Artificial Intelligence (AI) another bubble?
• Capacity is the new differentiator
• Sieving out the noise
• Key risk variables

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