VantagePoint: Artificial Intelligence Investing After the First Wave

A year ago, in our three-part series Navigating the AI Revolution, the central question for investors was where artificial intelligence’s (AI’s) disruptive potential would translate into meaningful economic and market change. That question now has a clearer answer. AI is already reshaping parts of the economy and market as capabilities improve rapidly, enterprise adoption broadens, and revenue growth becomes more visible across the ecosystem. Disruption is no longer a distant possibility. It is beginning to show up in software and labor-intensive functions such as customer service.

The investment question has changed with it. The first phase of AI investing was led by hyperscalers, advanced semiconductors, and large language model developers. The current phase has been driven by infrastructure buildout, and markets have already recognized much of that trade. Over the next few years, we expect the most attractive opportunities to center on more persistent bottlenecks, particularly around power, and on companies that control workflow, own the customer relationship, bring domain expertise, and turn AI output into business action. That includes the software infrastructure and applications that will shape how AI is deployed and managed. As companies integrate AI into workflows, adopters across industries should benefit. We expect much of the next phase of value creation to come from emerging AI-native companies and disruptive business models, though at this early stage, even today’s disruptors may be displaced.

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