Former Baillie Gifford fund manager says spoils of AI war will flow to hardware suppliers
The accelerating pace of AI development and deployment is shifting value creation from pure software to the underlying compute infrastructure, a trend becoming evident as AI models mature.
This perspective suggests a fundamental reallocation of capital and profit within the technology sector, impacting investment strategies and the competitive landscape for major tech players.
The focus moves from 'software eats the world' to 'hardware underpins AI', potentially diminishing the long-term dominance of traditional software business models in favor of chipmakers and hardware manufacturers.
- · Hardware suppliers
- · Chip manufacturers
- · AI infrastructure providers
- · Pure play software companies
- · Companies with high AI training costs
- · Traditional SaaS business models
Increased investment and M&A activity in the semiconductor and specialized AI hardware sectors.
A potential plateau or decline in the valuations of large, established software companies that fail to pivot towards hardware-centric AI strategies.
Geopolitical competition intensifies over control and access to advanced manufacturing capabilities for AI hardware, impacting global supply chains.
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Read at Financial Times — Technology