The mega super cycle

The current AI capex cycle is becoming one of the largest investment cycles in modern market history.

At the peak of previous technological waves — railways, cars, telephony, electrification or IT — capital expenditure looked significant at the time. In historical context, however, today’s AI-related investment boom stands out.

We believe in the AI revolution. But history also shows that major capex cycles rarely continue in a straight line forever. As new technologies become mainstream, investment intensity eventually normalises, competition increases, and returns become more difficult to sustain.

The risk for investors is not necessarily that AI disappoints. The risk is that markets extrapolate today’s exceptional investment levels too far into the future.