In tech cycles of the past, the demand side of the equation has captured almost all the value. The supply side mattered less as the incremental cost to produce and distribute decreased massively as the cycle moved forward.

In this new AI cycle, there seems to be little room to capture value if you’re anywhere above the infrastructure layer (the supply side).

The AI hardware supply is too constrained, the incremental costs to produce are enormous and suppliers are extremely well positioned to capture most of the value.

The other side of the AI equation is turning out to be more important than we have seen previously.

Fresh off the press on The Atomic Investor.. 👇