Hey Income Futurists,
Last issue was about the new market for compute. This one’s about the companies buying all of it.
I split the AI buildout into two camps: the companies that have to spend, and the companies that get spent on.
The election hits the first group hardest, and I’ll lay out how on the last morning of the Midterm Money Multiplier, a free three-day event hosted by Garrett Baldwin that kicks off tomorrow at 10 AM ET. Tap this link to register.
Why the spenders are in the crosshairs
The hyperscalers and AI labs can’t stop spending. Nobody wants to finish third. But a Democratic House likely brings more oversight of data centers and the AI industry, and more scrutiny of who pays for the power.
So higher build costs, slower permits and a few subpoenas, all landing on companies that are already spending at a pace that makes investors nervous.
That’s why I say mega-cap cloud is too hard to handicap right now. Take Google. I haven’t really owned it since around 375. Search growth looks to be slowing, and agentic AI isn’t good for ads. Agents don’t look at ads.
The twist: regulation builds moats
Investigations often turn into rules, and the incumbents help write them.
Look at OpenAI’s cybersecurity program. Its most capable cyber model only goes to vetted defenders through what it calls Trusted Access for Cyber. If that kind of gate gets written into how the internet gets secured, the big labs become the gatekeepers and the cheaper open-source alternatives get pushed to the side.
Big Tech gets squeezed by Washington, and some of it walks away with a moat. Which ones, and how Tuesday’s count changes the list, is what I’m bringing to Wednesday’s session.
How I’m playing it
I’d rather own the recipients: memory, the box makers riding the shift to on-prem AI, and the grid. Their demand doesn’t need Washington’s permission.
The spenders I’ll trade with defined risk, not own outright. If you want the names on both sides with the results already in, register for the Midterm Money Multiplier. It’s free, it starts tomorrow at 10 AM ET.
Here for a good time… AND a long time,
Hans Albrecht