James Anderson, the former Baillie Gifford fund manager who now runs the $1.6bn Lingotto Innovation Strategy, declared that two decades of dominance by US software and internet stocks are over. Massive AI investments by Google, Meta, Amazon and Microsoft are burning through cash flows, he told the Financial Times, with the spoils flowing disproportionately to a handful of hardware suppliers such as Nvidia, TSMC and ASML. The near-certainties of exponential platform growth are finished.

Morgan Stanley analysts estimate hyperscalers will spend about $2tn between 2024 and 2027 building out data centre capacity. The shift has already upended Wall Street's tech hierarchy—investors have punished traditional software companies while the PHLX Semiconductor Sector Index has risen 57 per cent so far this year.

Anderson retains a sizeable position in Nvidia and a small Tesla stake, while saying he would not rule out buying Anthropic in an IPO. He favors Anthropic over OpenAI partly for cultural reasons, telling the FT the AI development task demands serious attention to company culture.

The hardware suppliers face minimal real competition. TSMC's dominance remains underestimated, and even Elon Musk's $119bn TeraFab project or Intel's revival would require extraordinary resources. Anderson and Samet acknowledge cycles will eventually emerge, but hardware suppliers hold pricing power—no one can say no to their rates.