The Infrastructure Thesis

  Throughout history, major technological shifts have created a special category of companies. These firms do not necessarily build the final product used by consumers. Instead, they supply the essential tools that everyone else depends on. In many ways, they resemble arms dealers in an economic sense. They sell the equipment required by all participants in a technological race. The AI boom is beginning to create a similar class of firms. While attention often focuses on companies building AI models or consumer applications, another group of businesses is quietly benefiting from the expansion of AI infrastructure. These companies provide the critical components required to build and operate AI systems. Semiconductor manufacturers produce the chips that power machine learning workloads. Networking companies supply the equipment that connects thousands of servers together. Power equipment firms manufacture transformers, switchgear, and electrical systems that allow data centers to op...