Since the start of tech supremacy, the most attractive feature was their high-growth, asset-light business models. With trillions projected to be spent on infrastructure, that is no longer the case.
This capital allocation paradox is the most underappreciated risk in tech right now. What made these companies dominant was their ability to scale without proportional capital, but the AI infrastructure arms race is forcing them into a completely different economic model. The irony is that chasing AI leadership might actualy compress the exact valuation premiums that justified their market caps in the first place. If returns on this capex don't materialize, we're looking at one of the largest misallocations in modern corporate histry.
This capital allocation paradox is the most underappreciated risk in tech right now. What made these companies dominant was their ability to scale without proportional capital, but the AI infrastructure arms race is forcing them into a completely different economic model. The irony is that chasing AI leadership might actualy compress the exact valuation premiums that justified their market caps in the first place. If returns on this capex don't materialize, we're looking at one of the largest misallocations in modern corporate histry.
Agreed!