AI ACTIVITY

AI is simultaneously creating pricing power and eroding it. In addition to the uncertainty surrounding future cash flows to the hyperscalers, LLMs are extending Big Tech’s dominance by automating and compressing margins for software as service providers (think Adobe, Salesforce…). But at the same time, hyperscaler AI demand is pushing up value where there are hard physical constraints and supply-chain bottlenecks including memory, energy infrastructure, energy storage, chips and more.